Charter Keck Cramer national executive director Bennett Wulff is acting as transaction advisor on behalf of vendor CPSU and said it was “the intention to diversify the organisation’s asset base coupled with the currently robust market conditions have led to the decision to divest the long-held asset”.
The building is 100 per cent occupied, providing a current net passing income of about $2.7 million with additional rental upside.
The building is for sale through Vince Kernahan, Steam Leung, Joseph Lin and Tom O’Neill of Colliers International and Jordan Lee, Andy Hu and Tim Grosmann of Savills Australia.
Savills Australia joint state head, Asia Markets Mr Lee said Haymarket is already benefiting from the state government’s urban transformation strategy, which is set to revitalise the Central Station precinct.
“Both Central Walk and the Sydney Metro will increase connectivity and accessibility elevating the district to a thriving commercial office destination,” he said.
Colliers International national director Mr Kernahan said 191 Thomas Street is strategically positioned in Sydney CBD’s southern precinct, now a recognised and innovation and technology precinct.
“The recent announcement by Atlassian to occupy a 50,000 sq m building at Lee Street, Broadway in 2024 has shone a light on the precinct,” Mr Kernahan said.
“Leasing demand for STEM businesses (Science, Technology, Engineering & Mathematics) is now greater than for Finance & Insurance, which has been the dominant office space user for decades.”
There is continued speculation that Google is looking at space around the Central Station redevelopment for a potential head-office campus.
Savills Australia joint state head, Asia Markets Mr Hu said market fundamentals in Haymarket remain extremely strong, pointing to growth for both rents and capital values.
The sale comes as transaction volumes in Australia’s office investment market surpassed the $20 billion mark for the first time in 2019, according to JLL’s annual ‘Australian Office Investment Review & Outlook 2020’.
The 2019 record year of office transactions at $22.5 billion comes off the back off the previous record year in 2018 of $19.87 billion.
JLL’s head of office investments, Australia Rob Sewell said the Australian office sector is attractive to a diverse range of domestic and offshore capital sources.
“The number of mega-deals has increased as investors are seeking to deploy significant amounts of capital and mega-deals allow larger investors to deploy funds in an efficient manner,” Mr Sewell said.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.