Fund managers trade Lane Cove offices on 4.8pc yield
Fund manager Oceana Property Partners has followed up its acquisition of the 90-year-old West Block building near Parliament House in Canberra in February, with the $31.5 million purchase of a commercial building in Lane Cove West on Sydney’s lower north shore.
OPP acquired the 15 Orion Road property – an eight-level commercial building with 9500sq m of lettable space – on a yield of 4.77 per cent.
It’s the fourth asset acquired by the commercial property fund, which was established last year by Grant Traub, former Centennial Property Group head of real estate, and David Lewis, founder of alternative investment manager Oceana Investments.
Built in 1998, 15 Orion Road offers 6500sq m of office accommodation, 3000sq m of warehouse facilities and a multi-deck car park with 230 spaces. It stands on a 7000sq m site at the entrance to the Lane Cove West Business Park.
The property was offloaded by another Sydney-based fund manager, Argus Property Partners, which paid $21 million for it in 2016 on a yield of 6.7 per cent.
Tenants at 15 Orion Road include window, door repairs and maintenance company ASQB, and marine electronics firm Navico.
CI Australia’s Chris Veitch, who brokered the deal, said the Lane Cove West Business Park was the focus of development activity including a new hyperscale data centre by AirTrunk, a near sold-out multi-unit warehouse complex by Hannas Group and Ford Land’s approved multi-level last mile logistics facility.
Mr Veitch said OPP would undertake a comprehensive refurbishment program to create modern office suites at 15 Orion Road.
An April report on Sydney’s north shore office market by Ray White Commercial noted that despite a “high vacancy environment, demand has not dissipated to purchase office assets”.
The report noted that many businesses had rationalised their space “and as a result, both vacancy and sub-lease vacancies have increased substantially”.
Macquarie Park, which is located to the north of Lane Cove West, had a 9.8 per cent vacancy rate with net asking rents averaging $420 for every square metre of prime space.
