HB+B Property and AMP Capital – Real Estate have sold an office in Sydney’s Tech Central precinct for $59.5 million, achieving a tight yield of 3.1%.
An unnamed buyer purchased the 55-59 Regent Street property in Chippendale – located near the $3 billion Central Place Sydney development project set to become the new Australian headquarters of Australian tech company Atlassian.
The four-storey property offered 2,931 sqm of floor space and was 88% occupied by the Institute of Creative Arts and Technology, with a lease expiry of seven years.
The Tech Central precinct was made up of Haymarket, Surry Hills, Ultimo, Redfern, Chippendale and Everleigh and has been dubbed Australia’s answer to Silicon Valley in the US.
The vendors had acquired the property towards the end of 2020, with plans to refurbish and repurpose it.
However, nearly two years following their purchase, both firms took the opportunity to offload the office asset.
“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,” said AMP’s Capital Fund Manager, Tim Fallet.
HB+B Property’s Development Manager, Chris Lykoudis said the sale underpinned the company’s strong belief in the city fringe moving forward.
“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,” Lykoudis said.
JLL’s Associate Director Mitch Noonan and Director James Aroney brokered the deal.
“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,” Noonan said.
In a continued trend of big investments in Australia, a $596 million deal was struck earlier this year between Hong Kong investment firm Link REIT and Oxford Properties for offices across Sydney and Melbourne.
Further north, Brisbane saw a huge $420 million deal for Marquette Properties to acquire office towers in the Golden Triangle.