Liverpool office building set for new amenities after $46m sale

The office building at 203 Northumberland St in Liverpool, Sydney.
The office building at 203 Northumberland St in Liverpool, Sydney.

Boutique property house Stirling Property Funds has bought an office building in Liverpool in Sydney’s western suburbs for $46 million for a new unlisted fund.

The move is one of the largest by the company which was formed last year when residential group Legacy Property, headed by Matthew Hyder, joined with former Bankminster Properties and Centuria executives, including Matthew Coy and David Govey, and ex-M&G Real Estate’s Scott Girard.

The group’s 203 Northumberland St Fund will own the B-grade grade eight-storey office building that is expected to benefit from rising infrastructure investment and the development of the airport at Badgerys Creek.

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In a sign of the area’s rising values construction group Built has recently proposed a $400 million project for the CBD with the council.

Stirling has raised $27.4 million which will be used, along with bank debt, to buy the office building at 203-209 Northumberland St. In addition to the 7384sqm office complex the property also includes a car park at 64 Bathurst St.

Stirling will use its asset management skills to boost the amenity of the building for existing tenants and also to draw in some new occupants.

The building is already 82% occupied with a rental guarantee covering the vacant space during the first six months. The building has a weighted average lease expiry of 3.6 years and is currently leased to 10 tenants.

Current lease terms are below market rates and purchase price equates to $5431 per square metres with Stirling planning to reposition the building in order to lease it up, and to deliver higher average rents and increase its value over the fund’s life.

The adjoining car park has development application in at Liverpool council for a mixed-use building with 66 apartments and commercial space.

The deal is Stirling’s second in Sydney’s suburbs. In 2018 the group bought its first property at 2 Byfield St in Macquarie Park for just over $15 million.

The latest sale was done offmarket. Knight Frank’s Wally Scales handled the sale but refused to comment on the transaction.

The fund was attractive to investors and was over-subscribed as it offered a total return of more than 12 per cent per annum.

Stirling is targeting average net cash distributions of 5.4% per annum over the four years term.

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