Deals worth $750m lined up

Close to $750 million worth of high-quality office towers are set to change hands across Sydney in the next two months as private developers and listed trusts search for high-yielding assets.

Close to $750 million worth of high-quality office towers are set to change hands across Sydney in the next two months as private developers and listed trusts search for high-yielding assets.

The deals are being sought despite the weakening office-leasing market.

Agents said the buyers included real estate investment trusts and super funds, developers looking for residential conversions, and owner-occupiers seizing on the lower cost of borrowings.

The higher-quality assets are being sought after by REITs and overseas investors, while the mid-tier assets worth less than $70 million are attractive to smaller pension funds and developers.

Properties in the B-grade or secondary sector are attracting owner-occupiers, such as HNA Group's purchase of 1 York Street in the CBD.

Of the coming deals, Ausgrid is selling its 1200 square metres of land at 430-450 Pitt Street through Vince Kernahan of Colliers International. The price is estimated about $25 million.

Asian investors are expected to be interested in the site for residential redevelopment, given the proximity to Chinatown, Central Station and University of Technology, Sydney.

Nearby, Valad Property is close to finalising the sale of its 227 Elizabeth Street property, for $145 million, to a Chinese developer, which could also convert the 23-storey, B-grade site into a residential one.

It is believed Eureka Funds Management is doing due diligence for the office tower at 20 Hunter Street, being sold by the Fudo Capital II private equity real estate fund managed by CLSA. The price is expected to be about $110 million.

George Group is said to be selling a property at 66 King Street, valued about $50 million, which it bought as part of a portfolio from Singapore's Transputa group in 2007.

At Parramatta, where the first stage of Leighton's Parramatta Square project was given the green light this week, the Sydney Water Board site is close to being sold for about $175 million.

Brookfield is the vendor of the 23,331-square metre site through Josh Cullen and Scott Gray-Spencer at CBRE.

The police headquarters at Parramatta is also said to be coming on to the market with a $240 million price tag through agents at CBRE.

Other recently completed deals include the sale of 50 Margaret Street by private developer Philip Wolanski, who sold the site to Singaporean group Rockworth Asset Management for about $70 million.

It is expected this site will be converted to a residential one to benefit from the nearby Barangaroo South project.

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