Parramatta CBD in spotlight
Chinese investment funds and Australian office-focused real estate investment trusts are set to go on a shopping spree, with the $175 million Sydney Water head office in Parramatta tipped as the first big deal.
DEXUS Property, GPT and the acquisitive Cromwell Property are thought to be among the interested buyers, as is LaSalle Investment Management and other offshore groups.
The NSW Police headquarters at Parramatta is also said to be coming onto the market with a $240 million price tag through agents at CBRE.
Brookfield is the vendor of the 23,331 square-metre Sydney Water site through Josh Cullen and Scott Gray-Spencer at CBRE, and it sits adjacent to the $1.6 billion Parramatta Square redevelopment, and bus and rail interchange.
Moves on the deals are thought to have been triggered by the end of uncertainty before the federal election.
Managers of the REITs said with the low cost of debt, buyers were expected to return to higher-yielding, prime-grade office assets. Knight Frank's directors said CBD assets remained sought after by a broad range of both domestic and offshore buyers. Sales so far this year amount to $1.7 billion (for assets worth more than $10 million). This figure exceeded last year's total, although it had been boosted by several portfolio sales.
Meanwhile, the Parramatta City Council and Alfasi Property Developments have lodged development applications with the Joint Regional Planning Panel to launch a design excellence competition for two additional commercial towers. Designed by FJMT, the development forms stage three of the $1.6 billion Parramatta Square project, located at 153 Macquarie Street, and will include state-of-the-art A-grade office and community facilities.
The DA plans are for a 16-level, 22,000 square-metre commercial tower to be developed by Alfasi and a separate podium building to be developed by Parramatta City Council for its new civic building and library.
Parramatta lord mayor John Chedid expects the DA for stage three to be approved later this year, with construction to commence early next year.
The DAs for the first two stages of Parramatta Square were lodged earlier this year. Leighton Properties has been confirmed as developer for 169 Macquarie Street, and the DA is expected to be approved this year, with construction to commence by the end of the year and the development completed by late 2015. The DA for a 90-storey mixed-use tower on the corner of Church and Darcy streets is expected to be approved later this year.