Shimao International is moving to sell a half-share in Sydney’s landmark 175 Liverpool Street office tower to capitalise on continued strong interest in city investment opportunities and assets with longer term redevelopment potential.
Known as 175 Hyde, the prominent tower is located directly adjacent to Hyde Park, offering stunning panoramic views over the CBD, Opera House and across Hyde Park to Sydney Harbour.
CBRE’s Sharon Yang and James Parry have been appointed to guide the off-market sale campaign, which has already generated strong preliminary interest from local and offshore groups.
“The asset is perfectly positioned to capitalise on today’s favourable market fundamentals,” Ms Yang said.
“It is currently fully leased to a variety of tenants, 90% of which are blue-chip, including Telstra, the NSW Government and the Federal Government. In future, there is undoubted potential for a significant development, subject to the relevant planning approvals, with the building positioned on one of Sydney’s few large-scale, freehold island sites and the last north-facing Hyde Park opportunity.“
Ms Yang added; “This is an ideal opportunity to in invest an A-grade commercial asset with an excellent income, while positioning to capitalise on the high-end residential market in the future, when there are expected to be fewer and fewer opportunities available to buyers.”
The 31-level, A-grade tower was extensively refurbished in 2009 and 2013. It comprises a total lettable area of 48,877sqm, including ground floor retail space, and offers parking for 423 cars over four basement levels.
Shimao International’s Jerry Li; “The sale plans provide an opportunity for us to partner with a like-minded investor and share in the building’s future upside as Sydney’s market fundamentals continue to strengthen.”
Ms Yang noted that 175 Hyde was expected to receive a substantial uplift in rental income as existing leases expired due to constantly improving market conditions.
“The building is also positioned to capture the next upswing in Sydney’s residential market, coinciding with the asset’s major tenant expiries in 2024,” Ms Yang said, noting that the current WALE was 3.68 years.
“Over recent years, multiple luxury residential developments, hotel additions and dynamic urban spaces have been completed in the surrounding precinct. 175 Hyde holds the box seat as the anticipated availability of these sites become scarce.”
The midtown and southern precincts of the Sydney CBD have transformed significantly over recent years both for commercial and prime residential.
This is reflected in the fact that the city’s southern commercial precinct has the lowest overall vacancy rate, not just in Sydney’s CBD, but across the whole of Australia, according to CBRE research.
Further impetus is likely to be generated by the NSW Government’s long-term ambitions for the Central to Eveleigh precinct, which is expected to come to fruition in the next decade.
International Expressions of Interest close 4:00pm (AEDT) on December 6, 2018.
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