Elanor targets $180m Pyrmont gem as demand heats up

© 2018 Mark Merton Photography

AEW Capital Management is selling 19 Harris Street, Pyrmont. Picture: Mark Merton Photography

Elanor Investors is circling a Pyrmont office building being sold by Boston-based investment manager AEW Capital Management in one of the largest fringe office plays this year.

The impending $180m deal comes as contests for city assets held in the $1.3bn Dexus portfolio and in the city‘s suburbs heat up, with buyers paying a premium for high quality offices. City fringe towers are in vogue as companies look to draw staff back into offices as they offer good amenity. Pyrmont is also benefiting from an expected rent jump in coming years as a Metro station is planned for the area.

Once a deal is finalised the asset at 19 Harris Street could end up in Elanor’s listed office fund or a separate syndicates. The company declined to comment.

The building will have generated healthy returns for AEW, which picked it up for $143m in 2018 from a private client of UBS Asset Management.

AEW held the asset in its Value Investors Asia fund ­series.

The seven-storey A-grade building is being sold by JLL’s Luke Billiau, Simon Storry and James Aroney but they declined to comment as did AEW.

Pyrmont is developing a resemblance to global tech precincts, with the likes of Google and WeWork tenants in the inner-Sydney suburb.

The 12,568sq m building has campus-style flexible floor plates of about 2000sq m. Thomson Reuters is anchor tenant and L’Oreal Australia is among the dozen occupants.

AEW is also selling its 10 Barrack Street complex in the Sydney CBD.

Elanor has been active and this month launched the Elanor Warrawong Plaza Fund that will hold the shopping centre it bought from private equity firm Blackstone for $136.35m.

Elanor is seeking to raise $82.2m and has developed a repositioning strategy designed to unlock underlying value for investors.

The property funds manager grew funds under management to $2.07bn in the last financial year and has since launched the $346m Elanor Hotel and Accommodation Fund, which owns regional properties.