This article is from the Australian Property Journal archive
EUREKA Funds Management has settled on its acquisition of the NSW government’s Parramatta Justice Precinct for $170.1 million on a record yield of 6.27%.
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Eureka acquired the two adjacent A grade buildings at 160 Marsden St and 4 George St in December. 160 Marsden St and 4 George St comprise 19,841 sqm and 1,734 sqm of NLA respectively.
The properties were sold in a sale and leaseback deal with a 15-year term to the NSW government. The lease commences from the date of settlement, 24 June.
The deal was negotiated by Knight Frank`s James Parry and Wally Scales in conjunction with Scott Gray-Spencer and Josh Cullen of CBRE.
Parry said from an investment perspective, the flow of capital to non-CBD office markets has continued, with Parramatta being a major beneficiary.
“In 2014 (CY), sales volumes in Parramatta totalled $666 million (excluding the 1PSQ sale), across 10 transactions, with assets priced above $50 million accounting for 74% of this volume,” he added.
Scales said while yield firming in the Parramatta market between 2013 and mid 2014 was largely confined to the upper prime market, the recent sales of smaller A and B grade assets has resulted in yield compression of approximately 100bps across the broader market.
Australian Property Journal