QIC Real Estate could reap $70m from sale of Sydney office tower
The $16.8 billion QIC Global Real Estate is looking to benefit from a supercharged Sydney office tower market by selling its 275 George Street property near Wynyard Station, possibly reaping more than $70 million.
The group has been looking to buy in the Sydney market with an opportunity to take a further share in the 67-level MLC Centre, one of the world’s tallest reinforced concrete buildings. It has also been looking at the potential 25 per cent stake available in Brookfield’s $1.8 billion Wynyard Station redevelopment.
However, at the same time, QIC has been looking to capitalise on mushrooming values in the city where vacancy has tightened.
QIC Global Real Estate managing director Steven Leigh confirmed the group had elected to sell the asset on behalf of its investors in the Australia Core Plus Fund.
“Our decision to sell this asset centres on our active management approach to identify opportunities within our property portfolio that deliver maximum return for investors,” Mr Leigh said. “Strong leasing conditions in Sydney, coupled with surging market demand, provides us with the optimal settings for a successful sale.”
The B-grade office tower, located in the heart of Sydney’s CBD, comprises about 7357 square metres of office space over 13 levels.
QIC’s Australia Core Plus Fund has gained an approved development application to demolish the existing tower and rebuild a new office complex. Over the next three years the only new office development to be completed in the Sydney CBD are Investa’s 151 Clarence Street and 60 Martin Place. Both properties are being demolished to make way for new office towers.
Mr Leigh said QIC had appointed Colliers International to market the sale of the B-grade George Street building.
“Colliers International is preparing to launch an expressions of interest marketing campaign towards the end of February, and early indications point to the sale attracting strong market interest,” Mr Leigh said.
There have been some very strong transactions for Sydney’s older buildings, including the Coombes Property Group’s acquisition of 28 O’Connell Street for a record $91 million and a fully leased yield of under 5 per cent.
