Deal-hungry property investor Abacus Property Group has acquired a prominent A-grade building located in North Sydney for $311.3 million.
The ASX-listed company, which recently withdrew its joint bid with Charter Hall Group for Australian Unity Office Fund, bought the building in the face of stiff competition from large institutional buyers from Charter Hall, EG and Singapore's Keppel Capital.
The office building, located at 99 Walker Street, was sold off by the Oxford Investa Property Partnership at $16,100 per square metre of net lettable area in keeping with North Sydney's rising prices.
The transaction brings to a close Canadian group Oxford Properties’ programme of asset disposals from a portfolio it inherited through the $4.4 billion takeover of the listed Investa Office Fund late last year.
The 21-storey office tower, with sweeping Sydney Harbour views from the upper floors, was built 30 years ago and spans 19,295sq m on a 2,263sq m site. Major tenants include Jemena, GE Capital and Coles.
“This transaction aligns with our strategic priority of acquiring assets in specific locations where we see amenity and infrastructure improvements that we believe will translate to strong tenant demand,” Abacus managing director Steven Sewell said.
“The acquisition demonstrates our solid progress as Abacus transitions to a strong asset backed, annuity style business model.”
The commercial tower is located at the midpoint between North Sydney Station and Victoria Cross Station, due for completion in 2024.
According to recent research from commercial real estate agency Knight Frank, North Sydney's resurgence—with several new developments recently completed or underway—has seen rents catching up with the CBD.
Prime and secondary markets in North Sydney recorded gross effective rental growth of 9.2 per cent and 8.5 per cent respectively over the past 12 months.
Co-working and flexible office operators have also added North Sydney to their target market with WeWork recently opening its first North Sydney office, leasing around 4,100sq m in 50 Miller Street.