Hong Kong group pays premium to snare North Sydney tower
A private Hong Kong group has swooped on a North Sydney tower, buying it from a fund managed by Propertylink that is backed by investment bank Goldman Sachs.
In a sign that North Sydney office towers are leaping in value, the private group paid the Propertylink Enhanced Partnership $71 million for the 80 Mount St asset.
The building traded at a crisp initial yield of 4.32% and the deal was struck at a large 29% premium to its current book value.
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The selling pair bought the tower in 2016, as part of their $142 million acquisition of the Denison portfolio, and says the disposal has delivered an annualised total equity return of 58%.
Propertylink has a 25% interest in the PEP fund, with Goldman Sachs holding the majority interest of 75%.
The fund still holds another eight office and industrial assets. The sale will contribute about $3.5 million in co-investment income to Propertylink’s distributable earnings and, for the market, it shows the dramatic lift in value of North Sydney assets.
The selling agents were Knight Frank’s Tyler Talbot and Dominic Ong, and CBRE’s James Parry, Kenny Duncanson and Sharon Yang. The Mount Street tower is a B-grade office asset comprising 6204sq m of net lettable area across 14 levels.
Propertylink chief investment officer Peter McDonald says the group has refurbished and upgraded the building. It has also leased about 55% of the building area, driving occupancy from 75% to 92% over the past two years.
Propertylink chief executive Stuart Dawes says the PEP fund is one of the group’s most successful vehicles, and displays its active asset management style. He says Propertylink has a number of well-advanced initiatives to deliver growth in external funds.
This article originally appeared on www.theaustralian.com.au/property.
