Deutsche Asset Management buys up big in Sydney, Brisbane

Sydney’s CBD office market continues to improve
Sydney’s CBD office market continues to improve

Deutsche Asset Management has emerged as one of the top dealers of office property in Sydney and Brisbane this year, recently striking a deal to buy a Sydney block being sold by Blackstone Group’s 151 Property Group for about $120 million.

The German bank’s asset and wealth management arm has also been buying in Brisbane, last month snapping up F.A. Pidgeon & Son’s tower at 313 Adelaide St for $125 million.

That deal was struck for one of the group’s German funds and the capital behind the purchase of 151 Castlereagh St in Sydney is also out of Europe.

While the Brisbane deal was at a price reflecting a yield of 6.62%, the Sydney transaction has been agreed at about 5.5%.

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151 Property, formerly known as Valad, last year called in JLL to market the tower, but the parties and agent declined to comment on the transaction.

The sale will see 151 Property reap a healthy return from repositioning the once vacant block that it bought from receivers Ernst & Young after the global financial crisis.

The 13-level building sits on a 1325sqm site and has 10,380sqm of office space and retail areas of 2467sqm. Tenants include Leitch Hasson Dent, Jurlique International and RO Bird & Associates.

Deutsche Asset Management has bought the office tower at 151 Castlereagh St in Sydney.

Deutsche Asset Management has bought the office tower at 151 Castlereagh St in Sydney.

Sydney’s mid-town precinct has attracted some of the world’s largest investors, with more than $3 billion worth of deals struck in the last two years, and one of the largest deals of this year is also pending.

Wholesale trust heavyweight Investa Commercial Property Fund is tipped to this week close its purchase of an interest in 420 George St being sold by ­Fortius Funds Management.

The pricing of the 75% stake will be keenly watched, with estimates around the $400 million mark.

The sale of the office component is being handled by Savills and JLL, with the retail element, the MidCity Centre, being dealt with by Colliers International and McVay Real Estate.

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Hong Kong-based NGI is also back working to finalise its acquisition of the retail component of the complex.

Deutsche Asset Management is also selling. It is tipped to reap more than $130 million from offloading a Sussex St tower that overlooks Darling Harbour. It was listed for sale last month and ­Chinese developers and local players with offshore backing are leading the race.

The 19-level office tower, which financial services group ING shifts out of next year, is likely to be converted into apartments.

CBRE is selling the 140 Sussex St property, which also includes a historic warehouse occupied by Kingsley’s Steakhouse alongside the A-grade office tower. The site can accommodate a top-class development with up to 208 apartments over 35 levels.

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