Weekly Transaction Update - 8th December
The buying rush in the lead up to Christmas has continued this week with $1.4bn of transactions across 19 different deals recorded across the market.
The largest deal this week was the acquisition by GIC of Santos House in Brisbane for $380M. The 37 level A Grade building has a 6 Star Green Star rating and 5.5 Star NABERS rating. Aurecon and Santos are the major tenants comprising just over 50% of the NLA. The building has a current vacancy of just under 10% and a weighted average lease expiry of 3.8yrs. The sale at a 5.7% cap rate equates to $10,857/sqm of NLA. GIC have been hunting for assets in Brisbane and Perth in a counter cyclical play with local fund managers Prime West and Charter Hall. Primewest earlier snared 1 William Street for GIC for $175M and now Charter Hall look set to be managing GICs interest in Santos House.
Also selling this week was 130 Pitt Street Sydney at $229M on a low yield of 3.7%. Investa sold the asset to PA Realty, a JV between MEC and CLSA. With a 4% vacancy and a 2.1 year weighted average lease expiry, PA Realty will be hoping to capitalise on the tight Sydney office market to improve the overall yield. At $23,300/sqm of NLA, the sale price is the highest price per square metre paid for a commercial building in Sydney since at least 2015, if not well before.
Bright Ruby were in the news this week with sources indicating that their sale of 231 Elizabeth Street to Yuhu Group may be in jeopardy. Bright Ruby are a private investment firm owned by the Du family in Shandong, China. In 2015 they spent $440M acquiring the Hilton Hotel in Sydney, and in 2013 they paid $62.5M for 10 Barrack Street and $201M for 231 Elizabeth Street, Sydney.
Early this year Bright Ruby agreed to sell 231 Elizabeth St to Yuhu Group for $360M however the AFR reported that this sale may not proceed and that a safe and swift deal with Charter Hall was now a certainty following allegations that the Yuhu Group's founder received a tip-off from Senator Dastyari about a surveillance operation. Charter Hall are yet to confirm the acquisition. Meanwhile Bright Ruby also announced the sale this week of 10 Barrack Street to AEW Capital for $138.0M, providing a capital profit of $75.5M.
We will watch with interest the other Yuhu Group's purchases over the past few years, including 20 Berry Street for $59M, Pymble Corporate Centre for $78M, 115 Sailors Bay Rd for $23M and the big one, the Bakehouse Quarter North Strathfield for which they have paid Kiela Developments just a 10% option fee on a $380 purchase price.
A number of other deals worth mentioning include Centuria's purchase of 201 Pacific Highway and 77 Market Street Wollongong, Mirvac's purchase of 71 Turbot Street for a new office development site and two sales in North Sydney; 56 Berry Street by Dexus and 75 Miller Street.
Scroll through the list below or head to RE-Intel for further details.
* indicates unconfirmed price