Eureka finds buyer for $150m Sydney CBD tower

Eureka Funds Management has bought a tower on Clarence St in Sydney’s CBD.
Eureka Funds Management has bought a tower on Clarence St in Sydney’s CBD.

Wholesale specialist Eureka Funds Management has put a local group into due diligence on a tower at 55 Clarence St in Sydney’s central business district at a price close to $150 million.

The deal, struck late last week, comes after a vigorous contest for the tower, as buyers position for an expected lift in Sydney office rents.

The tower is already well-leased and boasts a high tenant retention rate, partly due to its proximity to Lend Lease’s South Barangaroo precinct.

Colliers International’s James Barber, James Girvan and Vince Kernahan and CBRE’s Josh Cullen and Rick Butler marketed the tower. But the firms declined to comment yesterday.

While the executives were coy, the tower had been targeted by the private City Freeholds as it looked to reinvest in Sydney’s central business district as another of its properties was being acquired by the NSW government.

Eureka has bought Sydney's 55 Clarence St for $150 million.

Eureka has bought Sydney’s 55 Clarence St for $150 million.

However, this could not be confirmed and the group did not return a call yesterday.

The sales campaign generated strong local and international buyer interest due to the building’s central location, diversified income stream and record of high tenant retention. Originally completed in 1973, the 14,888sqm building was extensively refurbished several times.

Eureka had undertaken a rolling refurbishment since acquiring the property in 2011 on behalf of Aria Property Fund.

The building now houses about 33 tenants, equating to an occupancy rate of 96%. The weighted average lease to expiry is about three years and the building has a five-star NABERS Energy rating.

Eureka, which declined to comment, has also been buying in Sydney, helping Germany’s Commerzbank on a deal to buy a Sydney tower for about $150 million last October.

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