This article is from the Australian Property Journal archive
FORT Street Real Estate Capital has acquired a fully leased office complex in south Sydney’s Mascot for $128.4 million.
The 19,277sqm, 10-level A-grade office building at 241 O’Riordan Street is known as The Gateway and was refurbished over 2014 and 2015. It has a ground floor café, two levels of basement parking for 399 cars and end-of-trip facilities.
It has a weighted average lease expiry of 5.5 years and transacted on a 6.5% yield. Tenants include AbbVie and Deutsche Bank, as well as the New South Wales government who occupies 44% of the net lettable area on a new seven-year lease.
Prominently positioned on O’Riordan Street and Qantas Drive, the building has large floorplates of 1,878sq and is targeting a 4.5 Star NABERS rating from 2018.
Fort Street acquired the property from 151 Property’s V-Plus fund for its new unlisted Australian Property Opportunities Fund III, which it has raised $140 million.
It has partnered with Walsh & Co Investments for the series, which is the responsible entity for the fund and Fort Street the manager.
The fund is targeting small-to-medium commercial investments, predominantly along the eastern seaboard.
David Rogers, director of investments for Fort Street Real Estate Capital, said this was an excellent first investment for the fund given its strategic position and high quality tenants providing strong and stable cash flow.
“The fund’s investment strategy is to seek quality assets in strategic locations with strong covenants and long-term rental growth potential.
“Over the past decade Mascot has transformed into a busy mixed-use office and residential precinct of considerable scale. Its location to critical infrastructure, ongoing improvement and limited forecast office supply is expected to provide strong rental growth given prime vacancy is at 5.0%, the third tightest market in Australia.” Rogers said.
Australian Property Journal
