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Collective sale on Macquarie Street puts 21 strata suites up for grabs

Property Markets / Transactions

Australia / Sydney

Aug 20 2018

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21 strata office suites in the Sydney CBD are to be offered in one line as part of a collective sale at 195 Macquarie Street.

The CBRE City Sales and Asian Markets team, comprising Nicholas Heaton, Danny Shi and Tao Shi, has been appointed to steer the sale, which represents 64.31% of the building’s unit entitlements.

The campaign dovetails with high levels of tenant demand and strong rental growth in the Sydney CBD, with market conditions expected to further improve as the city’s office vacancy rates continue to shrink.

The building also has potential for a landmark luxury residential development given its uninterrupted easterly views and favourable planning controls, subject to the relevant approvals.

Nicholas Heaton, head of the CBRE NSW Metropolitan Investments team, said the immediate purchaser focus would be the on the ability to tap into the growth occurring in the office sector.

CBRE Research’s Q2 2018 Office MarketView highlights that Sydney CBD prime effective rents grew 4.5% over the quarter to June 2018, whilst secondary effective rents increased 2.8% over the same period. Since Q2 2015, Sydney CBD prime net face rents have risen by 40%.

“This growth had led to a concurrent uplift in office capital values underpinned by substantial stock withdrawals, particularly compulsory acquisitions for state government infrastructure and a series of residential and hotel conversions, which had resulted in an undersupplied market,” Mr Heaton said.

Future government infrastructure such as the Sydney Metro, Sydney Light Rail and the pedestrianisation of George Street would play a role in continuing to drive capital value gains while transforming the way city operates, Mr Heaton said.

“195 Macquarie Street is well positioned to capitalise on these infrastructure improvements and offers the benefit of uninterrupted views of Sydney Harbour and The Royal Botanic Gardens from its higher levels, which cannot be built out due to its location opposite the Parliament House of NSW,” Mr Heaton noted.

CBRE Research predicts that Sydney’s office market fundamentals will continue to strengthen with the CBD vacancy rate expected to reach an historic low of 3.6% by the end of 2018. 

“In this market, buyers are willing to pay a premium as they can anticipate future rental and capital value growth,” CBRE’s Tao Shi said.

The 21 office suites in 195 Macquarie Street have a total net lettable area of circa 873sqm. They will be sold in one line via an Expressions of Interest campaign closing Wednesday, 12 September 2018. 

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