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Shayher pays $63m for Ashfield Office
September 11, 2019
Tawanise developer Shayher Group have acquired an office complex in Sydney's inner west in a recent on market transaction with Greg Shand's, Barana Group.
The property at 1 Thomas Street Ashfield comprises two office buildings, which were constructed in 1984 and 1987 and substantially refurbished in 2002. Each building comprises basement parking, ground floor lobby and four upper levels of office space.
With a combined lettable area of 10,620 sqm and 289 car spaces, the property's major tenant is NSW Department of Family and Community Services. Leases at the property run until February 2021 with a further 1 year option.
The buildings sit on a large site of 8,367sqm which has recently been given approval for an increase in the floor space ratio from 2:1 to 3:1, allowing for up to approx 25,263sqm of GFA. Predominately zoned B4 Mixed Use, the site could incorporate a mix of residential apartments and retail space.
Barana Group had hoped the site would fetch $75m of more, however Shayher Group have agreed terms at $63.3m, representing $7,565/sqm of site area and a passing yield of 5.6%.
Greg Shand acquired the site $47 million in 2015 from the Graf Family who had bought the property from Stockland in 2008, when it was run by Matthew Quinn, for $29.1m. Records show that Stockland acquired the complex in July 2000 and had the buildings in its books, including additions, at a cost of $37.3m, ahead of the credit crunch.
Our analysis suggests Barana would have generated a leveraged IRR of circa 15% on the 5 year investment.
Knight Frank managed the transaction on behalf of the Barana Group.