Real estate investor Security Capital Australia has sold a nine-level, B-grade office building in Sydney’s north shore, more than doubling its investment in less than a decade.
The Perth-based investor bought the asset in 2012 with another West Australian investment manager Property Bank for $25.5 million. Charter Hall was the vendor.
The two sold the building for $60 million on a passing yield of 5.86 per cent. The buyer remains undisclosed.
The fully-tenanted building is located on a 3,080sq m corner site nearby St Leonards station.
Knight Frank’s Tyler Talbot said that the 100 per cent let freehold asset attracted significant interest from local and offshore investors.
Talbot marketed the building alongside colleague Dominic Ong CI’s Bevan Kenny and Chris Veitch.
“[The building’s] tenants include Ramsay Health Care and Hyundai Merchant Marine. Significantly under-rented it provides an opportunity to capture strong rental growth upside," Talbot said.
Related: Chinese Investors Snap up Three Sites in Sydney's North Shore
Buoyed by Sydney CBD’s strong leasing market, north shore office space accounts for about 45 per cent the size of the CBD.
Investors have swooped in on the fringe commercial market, with recent major transactions including 1 Pacific Highway selling for $114.5 million to a private buyer and 75 Miller Street North Sydney selling for $52 million.
Both assets transacted on yields of less than 5 per cent. About $450 million of commercial office assets in North Sydney transacted during 2017, more than doubling the 2016 figure of $200 million.
