Raffles Education sell Parramatta Asset
The Raffles Education Group have sold (again) their asset at 1 Fitzwilliam Street Parramatta for approx $80m to offshore group, Wentruth. The Raffles Group had previously had an option agreement with Propertylink to acquire the site at $82m in 2018 which fell through following the ESR takeover.
Raffles Assets Australia, a subsidiary of Singapore-listed Raffles Education Corporation (REC), acquired 1-3 Fitzwilliam Street for $31.9m in 2014 from private investors including prominent Western Sydney investor Chandru Tolani. At that stage the building was predominantly vacant and Raffles had intended to open an Education facility on the site. Unfortunately Raffles failed to receive a Federal Government Licence to operate in Parramatta (despite having a successful facility in North Sydney) and were forced to lease the property to other parties.
The property faces the Parramatta Bus and Rail Interchange and is directly across the road from Westfield Parramatta and comprises a seven level office building with a total NLA of 9,677 sqm. There is approximately 668 sqm of ground floor retail accommodation, with extensive exposure and access to Fitzwilliam Street. Parking is provided within the building and arranged over two levels basement providing a total of 102 spaces.
The building provides floorplates of approximately 1,631sqm for Levels 1 to 3 and 1,343 sqm for Levels 4 to 6. The building had a $5m capital expenditure program since 2014 which included upgrades to the ground floor suites and upper levels.
The property lends itself to a major residential redevelopment, however the current planning controls including height limits, solar access controls and FSRs make any redevelopment difficult to stake up against the existing investment.
The latest deal was brokered by Colliers and Cushman & Wakefield.
Office transactions in Parramatta have been highly sought after in recent months with 80 George Street selling for $82m on a 5.2% yield, 9 George Street selling for $44.3m on a 6.3% yield and 2 Macquarie Street selling for $420m on a 6.0% yield.
The low vacancy rates, escalating rents and lower yields continue to drive demand for assets in Sydney's second CBD.