This article is from the Australian Property Journal archive
STOCKLAND has increased its footprint on a patch of North Sydney’s office market, spending $121 million to acquire two Walker St buildings next to its existing asset at number 110, and creating a site that could accommodate up to 60,000 sqm of office space.
The purchases of 118 Walker St and 122 Walker St will more than double the diversified property group’s existing Walker St landholding to create an amalgamated site of almost 2,300 sqm close proximity to the future Victoria Cross Metro Station.
Each of the three buildings, including Stockland’s existing asset, are fully leased and comprise about 10,000 sqm of net lettable area combined.
“This transaction aligns with our broader strategy to up-weight our workplace portfolio and increase our development pipeline, particularly through Sydney and Melbourne opportunities that enhance long-term income and valuation resilience,” Stockland managing director and chief executive officer, Mark Steinert said.
He said the acquisitions in the heart of the North Sydney business district increase the group’s exposure to the strong office market, which continues to strengthen and enjoy strong institutional interest, with a view to unlocking additional future development potential for new office and street level retail.
Subject to approvals, the amalgamated site will have the potential to accommodate up to 60,000 sqm of prime office space in the future, Stockland group executive and CEO commercial property, Louise Mason said.
The site is close to 86-88 Walker St, which will be home to Billbergia’s 48 storey office and hotel tower that will be the tallest in North Sydney. Capitland’s lodging business unit, The Ascott Limited, has just acquired the freehold serviced residence for $202.2 million.
Also nearby, BlackRock is reportedly close to finalising the $120 million sale of the 14 level office building at 2 Elizabeth Plaza to Singporean group SC Capital, while Dexus has recently completed its 100 Mount St tower, home to NBN Co, and the future home of Nine Entertainment Co, 1 Denison St will reach completion in the middle of 2020.
“Demand and supply fundamentals for workplace assets along the east coast remain strong. North Sydney is undergoing a significant transformation, with infrastructure investment including the new Victoria Cross Metro Station development driving increased tenant demand for the precinct,” Mason said.
“We also expect tenant demand for new, contemporary workspaces with large floorplates to continue to increase as North Sydney grows and transforms.
“We look forward to working with North Sydney Council and local stakeholders to progress our proposed plans for this site,” she said.
Property Council data shows North Sydney’s vacancy rate is 7.9%, and new supply is mostly pre-committed.
The acquisition of 118 Walker St completed on Friday, and the acquisition of 122 Walker St is expected to be finalised in July 2020.