This article is from the Australian Property Journal archive
PROPERTYLINK Group is in due diligence to acquire a six-storey Parramatta office building for $82 million from Singapore-listed Raffles Education Corporation, which is poised to realise a massive gain after buying the property for only $31.9 million four years ago.
The 9,782 sqm building at 1-3 Fitzwilliam Street is on a 2,049 sqm site in the Sydney’s western suburbs CBD, and is partly occupied by Raffles College Pty Ltd, a whole-owned subsidiary of tertiary education group REC.
As well as Propertylink’s own satisfaction, the transaction will also require approval form the Foreign Investment Review Board and REC shareholders to go ahead.
Raffles Assets Australia Ltd, also a wholly-owned subsidiary of REC, paid $31.9 million for the then-vacant asset less than four years ago to private investors, planning to use it for its Sydney college.
Late last year, Corval capitalised on the booming Parramatta market with the $86.3 million sale of 75 George Street to Mirvac. It had acquired the 9,568 sqm dual-tower, six-level tower for $32.55 million as a B-grade asset, and sold it as an A-grade building fully leased and anchored by St George Bank, at a $53.75 million premium.
Large-scale developments and infrastructure projects including the Parramatta Light Rail are attracting major tenants and driving commercial asset value growth, with A-grade asset capital values up 36.8% over the past 12 months, according new Savills data, with net face rents up 15.6% and net effective rents 22.9%. Vacancies have been crunched to 3.0%, far below the 10-year average of 7.5%.
Parramatta Council gave Walker Corporation the green light last September to convert its residential plans for 8 Parramatta Square, within its $2.4 billion Parramatta Square urban renewal project, to a 71,000 sqm A-grade office tower.
The Council study suggested would create an extra 10,000 jobs and an increase of $19.2 million in retail expenditure in the Parramatta CBD compared to the initial plans.
Parramatta Square alone has attracted high profile corporates, including PWC and Western Sydney University, Sydney Water in the project’s 2 Parramatta Square Tower, while National Australia Bank, the NSW Department of Planning and Environment, the NSW Office of Environment and Heritage, the Environment Protection Authority and NSW Department of Finance, Services and Innovation have also committed to 3 and 4 Parramatta Square.
Australian Property Journal
