Macau gambling magnate backs $265m Hyde Park buy

Markham has sold its tower next to Hyde Park for about $265 million.

A company backed by a Macau gaming dynasty has emerged as the buyer of a prize office complex opposite Sydney’s Hyde Park in a deal worth about $265 million.

The private company, associated with Macau gambling magnate Loi Keong Kuong, who owns the Rio Casino in Macau, will buy the 179 Elizabeth Street complex being sold by Sydney-based real estate group Mark­ham.

Markham put the 21-storey building on the market earlier this year and the buyer is expected to capitalise on both the building’s long-term conversion potential and the city’s rising rents.

Commercial Insights: Subscribe to receive the latest news and updates

Markham bought the asset from the LaSalle Asia Opportunity Fund III for $148.8 million in late 2015 in a deal showing a capitalisation rate of about 7%, but the latest play is at close to 5%.

The Sydney real estate fund manager undertook significant repositioning works on the 1992 tower and last year bought a floor inside the building to take full control of the office component.

Another company associated with Lio bought the ExxonMobil headquarters at Riverside Quay in Melbourne’s Southbank for $160 million in 2016. ExxonMobil last year agreed to shift into a Mirvac development in the Docklands.

The Loi family is expected to undertake an office refurbishment of the Riverside Quay address, rather than turn the building, near James Packer’s Crown casino, into a hotel.

There is still an expectation that the Melbourne site could be a hotel and gambling play in the longer term, but the Loi family would have to wait until 2050, when the Packer company’s monopoly lease is due to expire.

In Sydney, the Loi family could pursue a longer-term residential or hotel conversion as the strip is changing. Notably, Dexus last year won permission for a hotel and apartments at 201 Elizabeth St. Some low-rise parts of 179 Elizabeth have also been retained by the previous owners of the site, making it more likely the purchaser would pursue an office strategy.

Recent buyers of Sydney office towers including Zone Q and ­Greaton are chasing upside from resetting rents at higher levels, rather than undertaking short-term developments.

The multi-tenanted building also offers good opportunities for the Loi family to benefit from the city’s rising rents.

The sale was handled by Ian Hetherington, Simon Fenn and Ben Azar of Savills and James Barber, Adam Woodward and Vince Kernahan of Colliers International.

The building, built in 1992, has ground floor retail space, four basement levels of parking.

It has 16,520sqm of net lettable area, comprising 15,686sqm of office space over 13 levels and 834sqm of retail space.

The tower has a weighted average lease expiry of 3.9 years.

This article originally appeared on