Australian Unity’s Diversified Property Fund has sold an eight-storey office building in Parramatta, Sydney for $87.251 million, reflecting a 4.5% premium to its December 2021 book value.   

The 7,352 sqm office at 20 Smith Street comprised 11 tenants and a weighted average lease expiry by income of 1.8 years.  

AUDPF Fund Manager Jonathon Senior said the proceeds would be used for significant development projects at neighbourhood shopping centres in Blackburn, Victoria and Busselton, Western Australia 

“The sale of 20 Smith St Parramatta increases the fund’s weighted average lease expiry to 8.4 years from 7.5 years with sale proceeds ultimately being used to fund the two key development projects through to completion,” Senior said.  

The deal follows the fund’s sale of an industrial property in Rowville, Melbourne last December for $27.85 million, representing a 26% premium to the book value prior to the sale.  

The Parramatta transaction is the latest office deal in Sydney, following Link REIT’s $596 million deal with Oxford Properties to invest in a portfolio of five offices across Sydney and Melbourne in February. 

The duo acquired the Investa Gateway Office (IGO) portfolio comprising the office buildings at 126 Phillip Street, 388 George Street, 151 Clarence Street and 347 Kent Street in Sydney, as well as the 567 Collins Street office in Melbourne. 

Earlier that month, AEW sold the A-grade office tower at 10 Barrack Street in the Sydney CBD to the Shayher Group for $199 million, while Allianz Real Estate and the National Pension Service of Korea (NPS) bought a 50% stake in Commonwealth Bank Place for about $625 million.  

CapitaLand Integrated Commercial Trust bought a half stake in the 101 – 103 Miller Street and Greenwood Plaza office and retail complex in North Sydney for $422 million at the start of the year. 

Late last year, Dexus sold a 50% interest in 309-321 Kent Street in the CBD for $401 million, while the Dexus Office Partnership sold the 140 & 150 George Street, Parramatta property to Mintus for $154 million. 

Office market deals reached $3.4 billion across Australia during the first quarter of 2022 and totalled $24.8 billion for the past 12 months, according to Real Capital Analytics.