John Holland closes in on buyer for Macquarie Park complex

John Holland’s planned Macquarie Park building.
John Holland’s planned Macquarie Park building.

Property developer and builder John Holland is close to securing a buyer for the $350 million office complex it is undertaking in Sydney’s northern suburb of Macquarie Park, with the listed Growthpoint Properties Australia heading the field.

The company went to market mid-year seeking to pre-sell the building that will be occupied by the NSW government; it will become the first stage of an overall $1 billion precinct in the heart of Macquarie Park.

Deep-pocketed offshore companies, including Korean parties, are also chasing the property as building values rise across suburban Sydney surge and it could trade on a yield of less than 5%.

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Office and industrial property owner Growthpoint has built up a $4 billion portfolio over the last decade, with a specialty in buying up suburban office blocks and warehouses.

Growthpoint has been active this year and has acquired office buildings in Newstead, Queensland and West Perth, WA.

The trust also did two equity rights offers over the last year leaving it cashed up to buy assets along the eastern seaboard, as well as for its own projects, including a development in Melbourne’s Broadmeadows.

While the parties declined to comment, the pre-sale is in keeping with John Holland’s strategy to sell off near-complete buildings and pour proceeds back into its expanding development pipeline.

The developer pitched the Macquarie Square complex as setting a new standard for the area, dubbing it the region’s first A-grade office building, and others, including Frasers, Stockland and Goodman are also getting set.

John Holland has a strong record as a developer and last market year pre-sold 275 George St in the Sydney CBD to Japan’s Daibiru Corporation for close to $240 million at a crisp 4.5% cap rate.

The Macquarie Square project will begin with the A-grade, 35,000sqm office building. It is anchored by a 25,000sqm precommitment from the NSW government and also sports a new public park. JLL and Colliers International are handling the sale but declined to comment.

The developer is bullish about Macquarie Park’s strong rental growth and low vacancy levels with the A-grade office vacancy rate at just is 3.6 per cent, positioning the area for strong rental rises.

Listed real estate investment trusts have been highly competitive in recent commercial property contests.

The dual listed Investec Australia Property Fund has been buying and it last week bought three industrial properties from Charter Hall Prime Industrial Fund for $81 million via JLL.

The trust also unveiled an institutional placement to raise about $84m via JPMorgan and Macquarie Capital to fund the purchase of the three industrial properties in Perth, Adelaide and Darwin.

Other trusts that have bought assets and raised equity, including Dexus, Mirvac, GPT, Abacus and National Storage.

Funds run by both Charter Hall and Centuria Capital have also tapped the market to back their purchases.

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