Eureka pays $85m for Parramatta’s Century Centre

Sydney-based fund manager Eureka has paid $85 million for the former Century Centre.

Sydney-based fund manager Eureka has added to its holdings in Parramatta, paying private equity real estate group Altis Property about $85 million for the former Century Centre. 

Eureka, acting for a local super fund, outlaid the sum for the A-grade tower at 18 Smith St, with the purchase showing a yield of about 6.8%, in keeping with the area’s re-rating.

Values in Parramatta’s office market have jumped since Eureka emerged as one of the early movers in the area, paying $170.1 million to buy the NSW government’s Parramatta Justice Precinct in 2014.

Groups including developer Marprop, fund managers Charter Hall, Centuria Capital and Capital Property Funds, as well as the listed Growthpoint Properties, have also invested in Parramatta.

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The area has also drawn major developers with players including Walker Corporation and Dexus Property Group planning major new office towers, and a host of residential towers are under way.

Even shopping mall giant Scentre Group has an office tower on the drawing board, subject to winning a major precommitment.

The Eureka purchase was the first trade of an A-grade building in the area for less than $100 million since 2013 and reflected a rate per square metre of just over $7000.

The fully leased tower is considered a core holding and, with effectively no vacancy in Parramatta for A-grade space, it is well positioned.

Altis bought the Parramatta building three years ago. It was then known as the Century Centre and Altis paid developer Capital Corporation $47.5 million for the complex. It picked up the asset on a net yield of 9.82% before overhauling it and leasing up vacant space.

The tower is now occupied by corporate tenants including Telstra and Suncorp, and has a 4.5-star NABERS Energy Rating. The sale was handled by CBRE and Colliers International, but the agents declined to comment, as did the parties.

Altis earlier this year sold the AREEP II portfolio, an industrial offering of nine assets, mainly in NSW but also in Victoria and Queensland. That portfolio was split between Singaporean group Mapletree and AMP Capital.

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