Charter Hall to sell Sydney Olympic Park office building for $50 million

The 5931-square-metre property sits in the newly named single-asset Charter Hall Direct Sydney Olympic Park Fund with a forecast annualised distribution yield of 9.25 per cent.

Charter Hall has declined to comment on why it is selling the asset. In late 2017 unitholders in the fund voted overwhelmingly to extend the fund term by three years to December 2020.

The A-grade commercial building, which sits on a 1172 sq m site, has office accommodation across five levels and retail space on the ground floor.

The lease to Thales at the property will continue despite the sale, expiring in 2032 and giving the asset a weighted average lease expiry of 12.14 years.

Folkestone’s purchase of the building in 2017 was part of a series of acquisitions it made in the Sydney Olympic Park.

Folkestone’s funds management subsidiary acquired the leasehold land at 7 Murray Rose Avenue back then and had the office tower built by FDC Construction & Fitout.

The site is along the northern edge of the Sydney Olympic Park town centre. The fund holding the property offered a forecast annual distribution of 7.75 per cent back then.

It followed with a similar acquisition at 11 Murray Rose Avenue, a few doors away, also leasehold land. The six-storey office tower there was also built by FDC.

The Sydney Olympic Park has transformed from being a sports precinct to a town centre and commercial hub with a mixture of office buildings and now a growing number of apartment towers. It is part of the Sydney Olympic Park Master Plan 2030 for further residential expansion.

The office market in Sydney Olympic Park measures approximately 130,000 square metres with an approved pipeline of another 50,000 sq m. This puts the park as one of Sydney’s top five suburban office locations, ahead of Chatswood, Knight Frank says.