Real estate fund management M&G Real Estate has acquired a 25 per cent stake in an A-Grade office building in North Sydney’s CBD for AU$109.5 million.
Known as “Coca Cola Place”, the 25-storey commercial property was built in 2010 and comprises 28,552sq m of combined retail and office space.
The building, located at 40 Mount Street, is fully occupied with long-term anchor tenants Coca-Cola and Vodafone.
The Coca-Cola headquarters marks M&G’s second joint venture with Australian commercial office fund Investa Commercial Property Fund, and also its second office investment in Sydney after snapping up 400 George Street with ICPF in 2006.
The acquisition was made on behalf of M&G’s core Asia property strategy managed by Richard van den Berg, who said the fund was looking to increase its exposure in the Australian market.
“Australia’s economy continues on a positive trajectory and demand for modern office assets continues to increase as vacancy rates in North Sydney are expected to tighten from 6.1 per cent in mid-2018 to 5.7 per cent by the end of 2018,” he said.
“Coca-Cola Place is well positioned to benefit from this trend and will contribute significant value to our property strategies.”
Demand for office space in North Sydney’s central business district remains strong due to continued infrastructure and residential development, business services and technology sectors, and supply constraints up to 2020.