Weekly Transaction Update - 21st July
A larger number of smaller deals took place this week with just $402M of transactions across 22 assets.
The largest asset traded this week was 8 West Street North Sydney which sold for $60M to an offshore private investor. Activity in North Sydney has picked up due to low vacancy rates in the CBD pushing tenant demand across the bridge to North Sydney as well as a result of several stock withdrawls for residential conversions or for the Sydney Metro project. According to Savills, vacancy in North Sydney had fallen to 7.6% as at Dec 2016 with A Grade rents up 9% over the past 12 months. Three other North Sydney assets are currently on the market including 165 Walker Street, 1 Pacific Highway and 32 Walker Street.
The West Street property, located on the northern fringe of North Sydney is fully leased with a WALE of 2.5 years and sold on a yield of 5.5%. The site is zoned for mixed use and agents marketing the property promoted the potential residential conversion opportunity into 70 apartments. At this price point, the potential yield equates to $857,000 per apartment which is slightly below what Acqualand paid per unit for a DA Approved Milsons Point address with stunning Harbour views. It will be difficult to see a feasibility for the residential conversion of this asset stacking up.
Also this week, a portfolio of Good Guys stores were sold by the Muir family who had earlier pocketed $870M in cash for the sale of the retail chain to JB HiFi. Up for grabs were 14 family owned stores, 6 of which were acquired by an unnamed domestic investment manager for $63M on an average cap rate of 7%. Four others were sold for cica $30M with 4 yet to trade. Most of the assets were in regional locations.
Two retail assets also changed hands; the Entrade Shopping Centre in North Parramatta was sold by Centential Property Group for $41M, reflecting a 5.7% yield. The Centre which is predominantly leased by Coles, sits in a strata beneath a 5 level residential building. Also this week a freestanding Coles centre on the Gold Coast was acquired at a 4.6% yield by a private offshore investor for $30.025M.
There were a number of other deals this week. Scroll through the list below or head to Propel for further details.