Australia / Sydney
Feb 27 2018Add to Favorites
FV by GURNER, Fortitude Valley Brisbane
Developed by Rich-lister Tim Gurner's residential development company, GURNER, the 900-apartment development with an end value of approximately $600 million, comprises three residential towers and ground floor retail on a footprint of 5000sqm.
Designed by Elenberg Fraser, the first stage of 651 apartments consisting of two of the towers called “Flatiron” and “Valley House”, sold off the plan in record time in a matter of months during June 2014. Prices ranged from $360,000 for a one bedroom apartment and up to $660,000 for a two-bedroom apartment. Settlements commenced in September 2017.
The funding structure for Flatiron and Valley House was led by joint venture capital partner Thakral Capital Australia, and included a syndicated ANZ senior facility of $180 million, mezzanine funding provided by Apollo and Maxcap and a private family office via MP Funds Management as a blend of mezzanine and preferred equity, which were all repaid in full with principal and target return reached or exceeded.
132 Arthur Street, North Sydney
Centennial Property Group acquired the 16-level commercial office building comprising 14 levels of office accommodation, a café and 52 car bays over three above-ground levels, with extensive harbour views. The property benefits from two street frontages and entry points on Arthur Street and Little Walker Street. The asset purchase price was $36.75 million or $4,656 per sqm based on NLA and reflected a passing yield of 8.26%.
During the investment period, Centennial Property Group completed 17 leasing transactions comprising eight lease renewals and nine new lease deals, which improved the WALE from 2 to 3.42. The asset was sold to Aqualand after 28 months, in April 2017 for $70 million or $8,858 per sqm reflective of a passing yield of 5.5% or fully leased capitalisation rate of 5.7%.
10 Spring Street, Sydney
10 Spring Street, Sydney – also known as Swire House – is a 17 level B-grade commercial office tower completed circa 1980. Centuria Capital Group acquired the property at a cyclical low for $91.64 million in 2013, with a view that Sydney CBD would benefit from an improvement in investor appetite over the medium term. The purchase price was reflective of an 8% capitalisation rate.
Comprising two retail levels in an arcade configuration over the ground and upper ground floors, 14 upper levels of office accommodation and basement car parking for 41 cars, the property is located on the eastern side of Spring Street approximately 50 metres from Pitt Street and within the Core Precinct of Sydney CBD.
Centuria executed several key strategies to maximise value, including an investment to split and refurbish vacant floors and comprehensively refurbish foyers, amenities and the retail arcade.
The result was a dramatic improvement from 19% vacancy to 100% occupancy in just 18 months from purchase, a 32% increase in average passing office rental levels (record of $1200 per square metre) from high tenant demand, and a significant reinvigoration of the previously struggling retail arcade.
Following changes to the City of Sydney Draft Planning Strategy in 2016, the asset is now a Strategic Site providing the potential to construct a tower of up to 290 metres in height.
Centuria sold the asset in October 2017 to Lendlease for $270.05 million, reflecting a yield of 3.91% or $19,477 per sqm based on an NLA of 13,886, and a fully leased WALE of 3.32. The transaction broke previous sales records for CBD B-grade office buildings.
This transaction was listed as the AFR “Deal of the Year”.
Residential developer Legacy Property is set to commence a syndicated equity raise for its 7th and final stage of Caddens Hill, with minimum investment amounts starting at $250,000, targeting 17.5% investment return over the twelve month construction period. Legacy Property has $3bn of projects completed and in progress consisting of c.3,600 dwellings . 14 projects have been completed with another 7 underway, gross completed project values range from $85m to $248million for each project.
Home loan approvals have fallen significantly off the back of the APRA and the Royal Commission initiatives together with new Responsible Lending Criteria. The ABS recently reported that home loan approvals have fallen by 13.6% year on year and within that, investment loans have come back by c.20%
Off the back of successfully settling a $48m syndicated first mortgage for a residential apartment development in Sans Souci just weeks ago, Sydney-based real estate investment manager Centennial Property Group (CPG) opened a new fund with a focus on the industrial and logistics market, Centennial Industrial and Logistics Fund II (CIL II). The fund, available only to wholesale and private high net worth investors, opened on 1 November and was seeking to raise c. $38 million. CPG closed the fund less than two weeks later, well before the official close date, due to oversubscription.
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