This article is from the Australian Property Journal archive
THE 59 Goulburn St office tower in the south of Sydney’s CBD has tripled in value in less than six years, selling for $270 million to major Chinese developer Poly Australia.
Singapore-based SC Capital Partners, on behalf of its RECAP Fund, offloaded the 26-storey, 1973-built asset, which was held through Fortius Funds Management.
The tower has a net lettable area of 19,470 sqm with average floor plate sizes of 845 sqm. The sale reflects an initial yield of 4.9% and $13,867 per sqm, setting a new benchmark in Sydney’s southern CBD precinct.
SC Capital Partners and Fortius Funds Management executed a targeted refurbishment and lease-up strategy since buying the property from Roxy-Pacific Holdings in 2017 for $158 million after an initial deal with a rival consortium fell through. Roxy-Pacific Holdings made a $68 million profit on the sale of the building in just three years.
Upgrades were made to the ground floor foyer, lift lobbies, bathrooms and end of trip facilities, and the weighted average lease expiry was increased from 1.6 years to its current four years.
The site has a permit for a 38-storey tower with 407 hotel rooms and 90 apartments plus retail and office, but Poly Australia is not expected to take on the plans.
The local arm of Poly Developments and Holdings, Poly Australia’s current major projects include the 27 storey commercial tower at 210 George St in Sydney and the 24 storey commercial tower at 1000 La Trobe St in Melbourne’s Docklands.
Poly Developments and Holdings was ranked 245 in the Forbes Global 2000 list in 2018, and has assets valued at $176 billion and an annual revenue of $41 billion. The group’s construction pipeline presently total 43 million sqm.
SC Capital Partners has been a busy player on the buy side recently, collecting more than $500 million of buildings along the east coast, including 412 St Kilda Rd in Melbourne, the Finlay Crisp Centre in Canberra, Central Park Mall in Sydney, also with Fortius, and Parramatta’s 2 Wentworth St.
“The underlying office occupier markets of Sydney, Melbourne and Canberra remain tight, so our investment strategy is to target short- lease buildings and reposition them into high quality assets delivering stable, long-term income streams”, Suchad Chiaranussati, chairman of SC Capital Partners, commented.
James Barber, Adam Woodward and James Mitchell from Colliers and Simon Storry, Rob Sewell and James Aroney from JLL negotiated the transaction.
