Australian Unity sells top Parramatta tower at 20 Smith Street


Parramatta has seen a wave of developments that need tenants. Picture: NCA NewsWire / Damian Shaw

Fund manager Australian Unity has offloaded a Parramatta office block for $87.251m as the national wave of deal-making hits Sydney.

The city has seen relatively few office trades this year but activity is now rising with suburban markets leading the way initially.

In Parramatta, a private group bought the building at 20 Smith Street, with the price ahead of its $83.5m book value.

The building was sold by the $615m Australian Unity Diversified Property Fund, which earlier this year ended merger talks with its listed sister, the Australian Unity Office Fund.

The listed vehicle in March tapped Colliers and Knight Frank to sell the assets in its $600m-plus portfolio as it seeks to realise the value of its holdings.

The Parramatta tower was sold by John McCann of Colliers and Joshua Charles of One Commercial. Australian Unity said the sale was in line with the portfolio’s re-positioning strategy.

Fund manager Jonathon Senior said the proceeds of the Parramatta sale and those from an industrial property in Melbourne’s Rowville it sold last December for $27.85m would go into projects at neighbourhood shopping centres in Blackburn, Victoria and Busselton, WA. Investors will also receive a special distribution.

Australian Unity extensively refurbished the 7349sq m building over the last five years and it had about 11 tenants with GHD the major occupant. The building, which has eight storeys of office space, has a weighted average lease expiry of 1.8 years.

Some listed groups are taking a slightly more cautious approach to buying as interest rate rises loom and office vacancy could be stubbornly high in some areas, including Parramatta which has seen a wave of new developments which need tenants.

But others are moving quickly to get fresh projects underway.

Private group Mintus last year snapped up another Parramatta tower at 140-150 George Street from the Dexus Office Partnership for $154m and is planning an overhaul.