Singapore-based SC Capital Partners has agreed to buy an office tower in Sydney’s second busiest hub, Parramatta, from Australian property group Centuria for A$105.3m (US$72m).
Centuria bought the 2 Wentworth Street property for A$45.1m in 2014, reflecting a total return of 186% from the five-year investment, the seller said.
Sydney remains one of the most popular investment hot spots in Asia Pacific, racking up about US$7.8bn in commercial property transaction volumes during the first nine months of 2019, according to RCA.
“Two Wentworth is an excellent addition to the SCORE+ fund portfolio and is consistent with its strategy of acquiring well-located and stable, income-generating assets,” said Suchad Chiaranussati, chairman and founder of SC Capital Partners.
The fully-let grade-A asset offers more than 10,000 sq.m. of net lettable area, and is mostly occupied by government tenants.
It is located in the Parramatta CBD near Parramatta Square, Parramatta Transport Interchange and Westfield Parramatta shopping centre.
The buyer noted that A-grade office vacancy in Parramatta was currently sitting at 0.6%, which was the lowest it had been since 1990.
“When we purchased Wentworth Street in December 2014, our view was that the Parramatta office market was poised to benefit from a number of positive factors, including improving infrastructure links, the decentralisation of NSW government departments, and the overall gentrification of the area,” said Centuria Joint-CEO Jason Huljich.
“At the same time, A-grade office vacancy was below 1%, which we believed could support stronger tenant appetite for quality office properties, which in turn would mean upward pressure on rents – which the Parramatta market has seen in recent years.”
The transaction follows SC Capital’s acquisition of a former police headquarters in Melbourne on behalf of its opportunistic RECAP fund series for A$107.08m last month.
Centuria has offloaded other Sydney offices this year, including the sale of the Zenith building in Chatswood for $438m in June, as well as its half stake in 8 Central Avenue for $191m.
The deal was brokered by Steven Kearney, Simon Fenn, Mark Hansen and Claire Zouroudis from Cushman & Wakefield, as well as Bevan Kenny and Andrew Hunter from CI Australia.
Founded in 2004, SC Capital is a pan-Asian real estate investment manager with over $7.6bn in assets under management.
Listed on the Australian stock exchange, Centuria is a specialist investment manager with $6.7bn in AUM.