This article is from the Australian Property Journal archive
INSTITUTIONAL capital continues to be drawn to the Parramatta office market, with GPT making a second play in Sydney’s second city with the $277.6 million acquisition of the Eclipse Tower at 60 Station Street.
The fully leased 25,700 sqm A-grade office building traded at an initial yield of 5.34% and with a weighted average lease expiry of four years. Deloitte, Bupa, QBE Insurance and Servcorp are among its tenants.
It was sold by Rest Industry Super and went on the market in May this year with expectations of at least $275 million.
It has 19 levels of office accommodation with typical floor plates of around 1,300 sqm, as well as 148 car spaces, modern end-of-trip facilities, 5-Star NABERS Energy rating and a 5 Green Star rating. The tower is located directly across from Parramatta’s main bus and train interchange.
GPT adds the tower to its $300 million, 26,000 sqm 32 Smith Street development, for which it received development approval from the City of Parramatta Council in May. Earlier this month, it secured QBE as the anchor tenant for the building across 13,600 sqm.
The group’s head of office & logistics, Matthew Faddy said the group was pleased to have increased its exposure to one of Australia’s best performing office markets.
“Parramatta’s office market already has one of the lowest vacancy rates for A-Grade office space in Australia and we continue to see strong demand for quality office space,” Faddy said.
Property Council of Australia data showed Sydney’s second city had a prime-grade vacancy of 0% and total vacancy firming from 4.3% to 3.2% over the 12 months to June. A-grade net face rents rose by 13.0% over the period, and capital value growth outpaced the Sydney CBD.
Parramatta is heading into a new development cycle, but the 129,500 sqm of new additions under construction, which represents 18.3% of total stock, is 100% pre-committed.
Major players including Charter Hall, Dexus and Walker Corporation have stamped themselves on the booming office market.
Dexus received approval of a concept scheme for a 33-storey office tower at 140 George Street, and Scentre Group is refining plans for a 100,000 sqm tower of 40 levels above the existing shopping centre.
Walker Corporation, meanwhile, received the Council’s permission to reposition its future hotel and residential Aspire Tower at 8 Parramatta Square to a commercial building with a combined lettable area of 122,000 sqm, taking total commercial development in Parramatta Square to 250,000 sqm of prime A-grade office space.
Developer and investor, Coombes Property Group and Drivas Property Group have lodged an application to build a 23-storey building of 35,000 sqm at 50 Macquarie Street and 220 Church Street.
Faddy said the NSW Government’s significant level of infrastructure investment around the Greater Parramatta area, including plans for new light rail, Metro rail and motorway connections, is set to reinforce Parramatta’s importance as Sydney’s second CBD.
Australian Property Journal
