$40m deal: Surry Hills office nearly doubles price in five years

Funds management house Marks Henderson has bought 19 Foster Street in Surry Hills, Sydney, for $39.5 million.

Funds management house Marks Henderson has swooped on an office building in inner-Sydney Surry Hills in a $39.5 million deal.

The group bought 19 Foster St from Security Capital Australia on a crisp yield of 4.8%, with the rate reflecting the area’s strong performance.

Security Capital picked up the 3154sqm five-level building for just over $22 million five years ago and the lift reflects both the overhaul of the area and the property.

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The deal was negotiated by Knight Frank’s Jonathan Vaughan and John Bowie Wilson and Karbon Property’s James McCourt and Joshua Watts.

The building was refurbished in 2013, delivering about 2123sqm of industrial-style creative office space and more than 1000sqm of retail and showground space.

The fully let complex has a weighted average lease expiry of 27 months.

Vaughan says the property received strong buyer interest, saying the sale demonstrated the continued popularity of the Surry Hills market.

McCourt says the building appealed to a significant investor pool due to its tenant and expiry profile, and the buyer is hoping to capitalise on the generational shift in the way people work and use office space.

This article originally appeared on www.theaustralian.com.au/property.