Allianz Real Estate and the National Pension Service of Korea (NPS) have bought a 50% stake in Sydney’s Commonwealth Bank Place for about $625 million.
Known as Darling Quarter, the property offers about 61,000 sqm of net lettable office space across two towers, in addition to retail shops on the ground level.
The campus is located on Harbour Street and has a 99.7% committed occupancy rate, with the entire office component leased to the Commonwealth Bank of Australia with a weighted average lease expiry of more than 12 years.
The stake was acquired by the AREAP Core I fund, which is managed by Allianz Real Estate on behalf of NPS and Allianz.
“The pandemic has re-emphasised the importance of micro location, city density, asset quality and ESG when investing in an office asset,” said Danny Phuan, Asia-Pacific Head of Acquisitions for Allianz Real Estate.
“Sydney is one of the most liveable cities in the world and the long-term outlook for the Sydney office market remains favourable, supported by robust economic fundamentals, an attractive labour market and strong infrastructure investments.”
Darling Quarter was also awarded 6-Star Green Star Design and As-Built certification and operates with 6-Star NABERS Energy and 6-Star Water ratings.
CBRE acted on behalf of the vendor as the exclusive agent, with the transaction negotiated by CBRE’s Flint Davidson, Stuart McCann and James Parry.
“Darling Quarter represents what core capital is seeking across income security and growth, outstanding ESG credentials and the ability to gain exposure to the exceptionally tightly held premium-grade office sector in Sydney,” said Flint Davidson, CBRE’s Pacific Head of Capital Markets – Office.
“The Australian office real estate market remains highly attractive in a regional and global context, given the relative attractive returns available and relative strength of the economy.”
The transaction marks the latest in a string of Sydney office deals in recent months, including CapitaLand Integrated Commercial Trust’s purchase of a half stake in the 101 – 103 Miller Street building in North Sydney for $422 million.
The deal followed its acquisition of two grade-A office buildings in Sydney for $330.7 million in December last year.
Dexus recently sold its interests in two offices in Sydney’s CBD and Parramatta totalling $555m, in addition to another Sydney CBD office for $385 million.
Abacus Property acquired a Sydney CBD office building for $250 million, while Stadia Capital purchased a Harry Seidler-designed office building in North Sydney from a consortium of investors for more than $80 million.
2021 was an important year for Australian office real estate investment – check out Australia’s biggest office property deals of 2021.