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Credit Suisse Offloads 50% Stake in Sydney Building

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Financial holding company Credit Suisse have announced that they intend to sell a 50 per cent stake in a triple A-rated office building in the heart of Sydney’s CBD.

Located at 52 Goulburn Street, the building is one of six prime-grade assets larger than 10,000 square metres that have been built in Sydney’s midtown precinct since 2007. Global alternative asset manager Brookfield own the other 50 per cent share.

It is currently leased until 2022 to the Australian Tax Office with a 4.6-year WALE and fixed annual increases of 3.5 per cent.

“52 Goulburn Street will be attractive to investors looking for assets with strong covenants offering security of income,” JLL Head of Sales and Investments Paul Noonan said.

The sale comes a week after the world’s largest real estate owner, Blackstone, sold its 50 per cent share in Sydney’s Westpac headquarters in a transaction expected to yield more than $800 million.

[Related reading: Investors Double Money on Sydney Tower]

Credit Suisse will be expecting a positive result from an inevitable sale, as the Sydney CBD office market recorded a 6 per cent increase in demand for office space to 185,555 square metres in in the fourth quarter of 2017, up from 174,330 square metre in the same period during 2016.

Sydney CBD net absorption was positive in 2017 and vacancy tightened to 5.4 per cent. Low vacancy continues to exert upward pressure on Sydney CBD rents.

[Related reading: Strong Employment Growth Puts Pressure on Office Space in Sydney, Melbourne]

The latest market research revealed leasing activity was concentrated in good quality assets with the prime grade vacancy rate, compressing to 5.1 per cent which was the lowest since it’s been since 2008. Prime gross effective rents increased by 20.5 per cent over 2017.

52 Goulburn Street offers 23,104 square metres net lettable area, in addition to basement parking for 210 vehicles. The building boasts a NABERS energy rating of 5.5 stars.

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Article originally posted at: https://https://theurbandeveloper.com/articles/credit-suisse-offloads-50-stake-in-sydney-building-