A private investor has acquired a City Fringe office asset on a tight 3.1% stabilised yield, in the heart of the Tech Central precinct.
JLL’s Mitch Noonan and James Aroney exclusively brokered the off-market transaction for 55-59 Regent Street, Chippendale.
55-59 Regent Street is a four-storey office building providing 2,931sqm of floor space and 10 car parks, with frontage to both Central Railway and the Central Park Precinct. The Institute of Creative Arts and Technology occupies 88% of the net-lettable area (NLA), with a lease expiry of seven years.
The property was acquired by developer HB+B Property, together with AMP Capital – Real Estate for $37m in late 2020. The parties were in the early stages of a repositioning and Planning Proposal strategy for a major redevelopment of the office building.
HB+B Property’s Development Manager, Chris Lykoudis said, “Together with the procurement of the head lease, the sale of the asset in the current economic climate is a pleasing result for HB+B and its JV partner. The outcome underpins the company’s strong belief in the city fringe and its office value-add investment strategy moving forward.”
JLL’s Director, Capital Markets – NSW, Mitch Noonan said, “The City Fringe has remained a resilient investment destination for both private and institutional capital, which is being supported by major infrastructure and a strong occupier market with nearly 0% vacancy across prime assets in the core City Fringe precincts.”
The sale comes following the announcement of $3 billion Central Place Sydney gaining development approval, the joint venture of Dexus and Frasers Property, within the Tech Central precinct.
AMP Capital Fund Manager, Tim Fallet said, “While it’s been good to realise value following the recent refurb and re-lease of the property, we continue to be big believers in the precinct and have recently acquired another office property in the area with significant redevelopment plans on behalf of the same capital partner.”
The multibillion-dollar Tech Central precinct is being dubbed Australia’s answer to Silicon Valley and is attracting investors to Sydney’s City Fringe accordingly.
The property sits adjacent to Sydney’s Central Station and the proposed new Atlassian Australian headquarters, which will be a crucial component of Sydney’s southern CBD transformation. Upon completion, Atlassian Tower will deliver 130,000sqm of Premium-grade commercial floor place across two buildings.