Diversified fund manager GPT Group has amalgamated a future development site on George Street in the heart of the Parramatta CBD for $75 million.
The consolidated site covers about 2,871sq m, with the middle property previously being approved for a 28-storey hotel originally set to house Marriott’s Four Point by Sheraton brand.
The three sites include the historic Perth House at 85 George Street, a single-storey stone homestead built in 1841, a single-storey warehouse and showroom, as well as a seven-storey office building.
GPT confirmed the acquisition and said the site represented a medium-term development opportunity and which is expected to be able to accommodate up to 75,000sq m of prime office space.
The large site sits within close proximity to the proposed Sydney Metro West station.
The acquisition follows the pickup of a similar Parramatta office building, the Eclipse tower, which GPT bought from super fund Rest for $277.6 million.
Over recent years the western Sydney hub has become one of Australia’s tightest office markets, beating out other big city centres and emerging fringe office suburbs.
Parramatta has been busy for some time transforming from Australia’s oldest inland city into a second metropolitan centre that will anchor the Central River City.
Development opportunities in Parramatta were thrust into the spotlight in 2016 when it was sounded out as a key part of the future development of Sydney in plans unveiled by the Greater Sydney Commission.
It will also benefit significantly from the planned Western Sydney Metro rail line that will connect it to the Sydney CBD by a 20-minute train ride.
GPT manages a portfolio of office towers, industrial facilities and shopping malls worth more than $25 billion.
At the onset of the unfolding coronavirus crisis the company withdrew its earnings and distribution guidance and said it would value all of its investment properties independently.
GPT has since cut executive pay, withdrawing its 2020 short term incentive compensation scheme and the 2020–2022 long term incentive scheme to “ensure that the group is well positioned for the recovery phase post Covid-19”.
The group in recent months has seen its shares ricochet, down 52.6 per cent from its 10 February high of $6.34 to its March 23 low of $3, before recovering to $3.68.
The fund manager currently has $1.27 billion of available liquidity in cash and undrawn bank facilities, with less than $5 million of debt maturing through to December 2021.
Over the quarter GPT leased 27,600sq m of commercial space, holding an occupancy of 97.5 per cent, while also leasing of 38,500sqm of logistics space to reach an occupancy of 98.6 per cent.
The group also saw developments at Wembley Business Park in Berrinba and Pine Road in Yennora reach practical completion.
“We are pleased that we have been able to continue to demonstrate strong progress on our logistics growth strategy following the completion of three new high quality facilities, all of which are fully leased, and the acquisition of a well located asset in Melbourne,” Johnston said.
GPT also noted a slowing in retail sales due to restrictions after specialty sales lifted 3.0 per cent in January and 4.9 per cent in February on a year-on-year basis.
By mid-March, GPT said a drop in foot traffic and resulting store closures saw specialty sales plunge by 27.3 per cent and overall centre monthly sales were off by 21.3 per cent.
Supermarkets, by contrast, surged and monthly sales were up 19.7 per cent.