The Australian arm of Shanghai-listed Poly Developments has agreed to buy a Sydney office tower from Singapore-based SC Capital Partners for A$270m (US$181.6m).
The 26-storey tower, located at at 59 Goulburn Street, has 19,470 sq.m. of net lettable area, reflecting an initial yield of 4.9%, the seller announced.
At $13,867 per sq.m., the deal sets a new benchmark in Sydney’s Southern CBD precinct.
SC Capital and Fortius Funds Management, which holds the asset, acquired the tower in 2017 and completed a targeted refurbishment and lease-up strategy.
The refurbishment works included upgrades to ground floor foyer, lift lobbies, bathrooms and end-of-trip facilities, while the weighted average lease expiry was increased from 1.6 years to its current four years.
“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,” said Suchad Chiaranussati, chairman of SC Capital.
SC Capital has made numerous acquisitions in Australia over the past year, including its A$107m acquisition of a 19-storey office in Melbourne.
The firm also purchased an office tower in Parramatta for A$105m, as well as the Finlay Crisp Centre in Canberra and the Central Park Mall in Sydney.
Poly Developments entered the Australian market in 2015, and currently has 14 residential, commercial and mixed use projects in the country.
Poly Development also operates in UK, the US and China, and has A$176bn in assets under management.
Founded in 2004, SC Capital Partners is a real estate investment manager with more than $7bn in AUM.
Fortius Funds Management is a specialist property fund manager with operations in Sydney and Singapore.
The transaction was negotiated by Simon Storry, Rob Sewell and James Aroney from JLL, and James Barber, Adam Woodward and James Mitchell from Colliers International.