The University of Sydney has sold a commercial building in Sydney’s city fringe market of Glebe to a private investor for $39 million.
The property at 431 Glebe Point Road offers 6,934 sqm of gross building area and 43 marked car spaces on a 2,415sqm block of land.
The asset, which is currently occupied by the Woolcock Institute of Medical Research, attracted 24 submissions during the sale campaign.
The demand for city fringe assets has been on the rise along with general demand from capital searching for sound property investments, according to Colliers.
The rising demand comes as long-term landowners increasingly look to unlock equity in existing assets to capture the current market momentum.
Andrew Graham, National Director Strategic Advisory at Colliers, said they had seen a steady rise in capital seeking assets and a visible shift in pricing with commercial and a range of other groups in play.
“We are now seeing a crossover in values where commercial outcomes are matching that of residential,” Mr Graham said.
“The result is a higher level of ‘cleaner’ submissions from prospective purchasers, with less emphasis on due diligence and conditional contracts which a residential bid generally requires.”
James Cowan, Director Investment Services at Colliers, said many organisations were looking for ways to consolidate their property portfolio in order to unlock capital for other business opportunities.
“Consider Allegro Funds divestment of the Best & Less Head Office for $29 million in 2020 via Colliers, and the imminent sale of 54 Parramatta Road, Forest Lodge, on behalf of Bedford College which is relocating to the Norwest,” Mr Cowan said.
“In the latter campaign, expressions of interest closed on Friday 12 November 2021 with six formal offers being received from a mixture of owner occupiers, investors and speculative developers recognising the underlying value.”
There have been a number of other notable commercial deals in Sydney in recent weeks, including Link REIT’s $538.2 million acquisition of half stakes in the Queen Victoria Building, The Strand Arcade and The Galeries.
Earlier this month, CIP Asset Management sold a 50% stake in Sydney’s Roselands shopping centre to JY Group for $167 million, while Centuria Office REIT purchased a half stake in a St Leonards office building for $68 million in September.