Melbourne private investor Marks Henderson has expanded its Sydney portfolio with a high profile $92.75 million office acquisition in Darlinghurst.
Mercer Property’s Tom Speakman and Matt Davoren teamed with CBRE’s Harry George to negotiate the sale of 19A Boundary Street on behalf of fund manager Haben Property Group.
The sale was struck at an initial yield of 4.7% and a build rate of $14,300/sqm, highlighting the ongoing demand for inner city investment opportunities.
The converted warehouse represents the latest Sydney investment for Marks Henderson, following the group’s March acquisition of 19 Foster Street, Surry Hills for $39.5 million.
Director Chris Marks said; “The 19A Boundary Street acquisition continues our theme of buying character buildings which are well positioned and appeal to creative and edgy tenants in the technology, advertising, media and information sectors.”
The fully leased Boundary Street building offers a total lettable area of 6,480sqm and is home to notable tenants such as creative agency Collider and celebrity chef Donna Hay.
It includes a ground floor retail showroom and secure parking for up to 51 vehicles.
“The sale campaign generated strong local, interstate and international buyer interest from both high net worth private investors and fund managers.” CBRE’s Mr George said.
“Key drawcards included the building’s location, scale and unique attributes, including its substantial parking allocation, high ceilings, natural lighting, balconies and 360-degree views. The property is also extremely well positioned to cater for next generation tenants focused on ‘live, work and play’ locations that meet the needs of a growing millennial workforce.”
The low supply and high demand for this style of space has pushed the office vacancy rate in Sydney’s city fringe market to circa 3%, the lowest rate of any commercial market in Australia.
Mercer Property’s Mr Speakman said this was underpinning interest in assets like 19A Boundary Street, which offered strong fundamentals and a diverse tenancy mix, with the Boundary Street building home to 53 tenants.
“The property also offers significant upside, with scope for a considerable uplift in the existing rents and potential for a variety of future exit strategies,” Mr Speakman said.
Mr Speakman noted that the building had benefitted from a recent upgrade, including a new lift, end-of-trip facilities and an overall upgrade of all amenities.
“As the lines between work and play continue to blur, occupiers are increasingly looking to grow their businesses and retain talent in creative commercial spaces such as 19A Boundary Street, which are surrounded by superior amenity and new restaurant bar concepts”.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
