International buyers drive Sydney office surge

A wave of office property deals has drawn in both local and international groups.
A wave of office property deals has drawn in both local and international groups.

The top end Sydney’s office market is seeing a surge of activity at the start of the second half of 2019 with more stock likely to the hit the market as global buyers drive a wave of new deals.

The wave of deals has drawn in both local and international groups, and they are often teaming up given the outsized scale of the transactions.

Deep-pocketed groups from Asia, the Middle East and North America are turning to local partners to take their properties to the next level.

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Charter Hall chief executive David Harrison is clear about the group’s ambitions to add value to the Chifley Tower and Plaza site in joint venture with Singapore’s GIC.

“We’ll look to create some value through looking at optimising the floor space in the project,” he says.

The group could draw on its expertise in luxury retail that has seen it win Louis Vuitton and Tiffany at Raine Square and a longer term overhaul could see it compared to the Wesley Place precinct in Melbourne.

“We’ve got a precinct strategy we’re applying with all major office assets throughout country,” he says.

Charter Hall could apply the same skills to the office block it is close to buying at 201 Elizabetht from Dexus and Perron Group.

It has the support of Abacus Property Group for that play and both groups have a focus on value-added repositioning.

Further deals with GIC are also in the wings as part of their long-term relationship.

Meanwhile, the contest for the next major office skyscraper contest is heating up with Blackstone and Ivanhoe Cambridge tapping JLL and CBRE to offload a one-quarter stake in the $1.6 billion-plus Liberty Place precinct that serves as the ANZ headquarters in Sydney.

The Australian has been told that the tower’s co-owners, the GPT Wholesale Office Fund and superannuation fund-backed ISPT, are both keen to increase their stakes, with the Melbourne-based industry fund best placed.

GWOF already owns a half stake in Liberty Place and held this at a fair value of $725 million at the end of December last year. ISPT has a 25 per cent interest.

GPT has been a buying and recently picked up a quarter interest in the Darling Park 1 & 2 office and Cockle Bay Wharf from Canadian group Brookfield for $531m.

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