RF Corval Divests Heritage Woolsheds for $110m

The City of Sydney Council has purchased a heritage-listed office property in inner-city Sydney, for $110 million.

The property, the Woolstores at Alexandria, was bought from RF Corval, the property funds platform backed by the Roberts family–founders of builder Multiplex.

RF Corval had held it since 2014 when it paid $51.8 million, on a net yield of 7.5 per cent, for the three woolstores when they were in the final stages of being converted to offices.

Just 15 minutes from the Sydney CBD and eight minutes to Sydney Airport, the Woolstores comprises three restored heritage-listed wool sheds, reinvented as office spaces. The buildings are walking distance from the popular Grounds Café, Green Square Station and Sydney Park.

Major tenants include Ingham Property, Logitech, Living Edge, Swarovski and Thyssenkrupp Elevators.

The three restored heritage-listed wool sheds include exposed original timber trusses, light-filled and flexible office spaces, as well as outdoor common areas overlooking the Alexandria Canal. Each woolshed includes end-of-trip facilities and secured bike storage.  

RF Corval head of transactions Oliver Picone said the sale of the asset had achieved an investor internal rate of 21 per cent and an equity multiple of 3.1 times over the investment term.

“We acquired the property from the original developer as it neared completion, basing our strategy on the unique nature of the heritage office space and Alexandria being an up-and-coming market with the potential for growth,” Picone said.

“Our asset management team was then able to execute on this, by maintaining close to full occupancy over the whole investment period and driving the rents.”

▲ The property in Huntley Street was bought from the RF CorVal Woolstores Trust.

The Sydney-based funds management platform is a busy trader in the commercial property market managing a range of syndicates, trusts and mandates on behalf of institutions, offshore groups, family offices, high net worth investors and retail investors.

Earlier this year RF Corval sold a suburban office in Brisbane’s north-east, which it had similarly held since it was developed in 2015, for $46.5 million to a Sydney-based private investor.

Its latest transaction was handled by Steven Kearney and Mark Hansen of Cushman and Wakefield, and Michael Crombie and Adam Woodward of Colliers International. The deal reflected a 4.9 per cent yield and a weighted lease expiry of 3.3 years.

“The Alexandria Woostores site represents the epitome of creatively designed office space–a true adaptive reuse conversion,” Crombie said.

“The estate has always been successfully leased and City of Sydney were quick to seize this opportunity off market.”

There were originally around 250 woolsheds concentrated along Shea’s Creek, now known as the Alexandria Canal. The woolsheds were produced in the early 1940’s and were originally used to store and later export wool during the Second World War.

Overtime, many of the woolsheds deteriorated and were eventually demolished. The three that were considered to be in the best condition were listed as heritage items in 2005 to ensure that they were restored and preserved. 

The City of Sydney already owns another heritage office building,  Barrack House at 343 George Street, in the CBD, which it picked up from Abacus for $78 million in 2010. The council this year announced an upgrade for that heritage-listed building, which was known as Barrack House.