CBIC Recycles Parramatta Office Block After Upgrade

City of Brisbane Investment Corporation is striking while the iron is hot to divest of its B-grade Parramatta office block. 

CBIC acquired the commercial building in 2019 with a view to investing in a capital expenditure program to upgrade the property’s NABERS rating. 

CBIC chief executive Kirsty Rourke said now was the “optimal time” to recycle 9 George Street and reinvest in other opportunities after successfully repositioning the asset. 

Rourke said the building has been upgraded from a 2.5 star NABERS energy rating to 5 Star NABERS energy rating, to deliver a B-grade asset with A-grade services.

“The investment hypothesis at the time of acquisition was to invest in a capital expenditure program to upgrade the property’s environmental NABERS ratings, refurbish the common areas, as well as implement a strategic leasing program to generate rental and valuation growth,” Rourke said.

“At acquisition, the property had a NABERS energy rating of 2.5 stars. Significant capital upgrades have resulted in a 5 star NABERS energy rating and 3.5 star NABERS water rating.

“[Number] 9 George Street will appeal to a broad market, including the private capital and high-net-worth individuals, who remain the most active within the Sydney CBD and fringe.”

Rourke said CBIC had leased 2185sq m since acquisition and increased the office passing rental rate in the building from $447 per sq m to $516 per square metre. 

CBIC was able to attract NSW Government to a long-term lease shortly after Manpower vacated, six months after acquisition. 

“We believe that CBIC’s investment in the building over recent years will be very well received by the market. 

“We have executed our modernisation strategy that has improved the amenity for occupiers and increased the building’s NABERs ratings, enabling us to retain tenants such Watts McCray and Macquarie Bank on new leases over recent months.”

Colliers agents John McCann and James Girvan have been appointed to market the sale. McCann said sales results had been strong the Parramatta CBD with assets selling 6 per cent above book value. 

The building is 5479sq m and 91.4 per cent occupied with a WALE of 2.92 years and a fully leased income of more than $3 million.

This year CBIC chief executive Kirsty Rourke signalled her confidence in Australia’s robust office sector, after spending more than $70 million on an office block in Canberra. 

And the market has continued to defy the sluggish occupancy rates, with international capital increasingly looking for opportunities to deploy capital across the sector along the eastern seaboard.