Credit Suisse offloading stake in Sydney CBD office block
Credit Suisse is offloading a 50 per cent interest in a commercial tower in the World Square precinct in Sydney’s CBD.
The 10-storey building at 52 Goulburn Street has an AAA-rated covenant thanks to its 100 per cent occupancy leased to the Australian Tax Office until 2022, with fixed annual increases of 3.5 per cent.
It is expected to attract interest from local and offshore investors.
Selling agent Knight Frank’s Paul Roberts, who is handling the sale with Ben Schubert and Neil Brookes, said the property’s 23,104 square metres of A-grade office space in Sydney’s CBD held “enormous rental growth potential”.
“Sydney is currently one of the world’s best-performing office markets, so this is an incredible opportunity for investors,” Mr Roberts said.
JLL co-agents Rob Sewell, who shares the listing with Paul Noonan, Stuart McCann and Luke Prokuda, said that the tower was a rare asset, given its grading and size.
“52 Goulburn Street is one of just six new prime-grade assets larger than 10,000 square metres that have been built in Sydney’s midtown precinct since 2007,” Mr Sewell said.
“With office development activity set to be limited over the medium term in midtown, this is a fantastic opportunity for investors to get in early.”
A recent JLL report found that Sydney CBD office vacancy fell to a 10-year low of 5.4 per cent in the December quarter, down from 7.7 per cent in 2016, while prime rents ballooned by more than 20 per cent in 2017.
Just around the corner from the World Square precinct, a 12-storey office tower at 299 Elizabeth Street sold earlier this month for $90 million, making double its value for its owners in four years.
And opposite World Square, $127 million plans were lodged with the City of Sydney council last December to redevelop an amalgamated 1225-square-metre site, which includes Irish pub Scruffy Murphy’s and Haymarket House, into a hotel, residential and retail complex.
Mr Noonan added that the Goulburn Street asset provides “one of the most secure income streams available for a commercial property investment”.
Mr Schubert said the property was surrounded by the city’s transport upgrades.
“It is ideally located to benefit from major infrastructure projects including the Sydney Metro and Light Rail, and forms part of the broader World Square precinct – one of Australia’s best-performing CBD shopping centres.”
Credit Suisse acquired its 50 per cent stake in 2007, when the building was completed, from builder Multiplex with the other half of the share held by Brookfield, which owns Multiplex.
The building was valued at $235 million in 2007.
Expressions of interest close on February 22.
