Diversified property group Mirvac has snapped up an A-Grade twin office tower at 75 George Street, Parramatta, in Sydney’s west from property fund manager and investor CorVal for $86.3 million.
The 9568sq m, six-level property is fully leased, with major tenant St George Bank occupying 68 per cent of the building. It has a net annual passing rent income of $4.8 million.
The acquisition is Mirvac’s foot in the door into the highly competitive Parramatta office market, which due to its growth as Sydney’s second CBD has no vacancy in prime grade office space.
Mirvac joins the slew of institutional commercial property investors and developers, including Walker Corporation, GPT Group and Coombes Property Group, flocking to the suburb to gain exposure to its office market.
“This acquisition provides us with exposure to the Parramatta CBD market, which has been one of the strongest performing markets nationally, with a prime vacancy rate that has averaged below 3 per cent for the past decade,” Mirvac’s head of office and industrial, Campbell Hanan said.
“This acquisition is well-timed to capitalise on $10 billion in committed infrastructure investment under way, which will transform Parramatta into a second Sydney CBD with significant scale.”
CorVal bought the underdeveloped tower in 2012 for just over $32 million and has obtained approval to add another two floors of 2600sq m office space to the building. The property comes with a scheme to redevelop the building into a 36-level tower on a 2668sq m site.
While underdeveloped, its ground floor foyer has been upgraded and there is a fully refurbished fifth floor.
This gives Mirvac the opportunity to develop a new landmark commercial office tower, Mr Hanan said.
“This acquisition sits within Mirvac’s directional mandate to acquire assets in key urban locations, and highlights our capacity to source and secure core assets with future development opportunities,” he said.
Groups such as Coombes Property Group and partner Drivas Property Group have forged ahead with this strategy. It is developing a new A-grade 34,277sq m office tower worth $227 million at 50 Macquarie Street and 220 Church Street.
Savills’ Simon Fenn, Graeme Russell, Ian Hetherington and Ben Azar handled the sale.
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