ASX-listed GPT Group has scooped up a 19-level office tower in Parramatta for $277.6 million as low vacancy rates and growing demand for A-grade office space continues in the city.
The purchase price reflects a 5.34 per cent yield for the Eclipse tower located at 60 Station Street.
The diversified property trust confirmed it exchanged unconditional contracts to acquire a 100 per cent interest for the $277.6 million tower.
Vendor Rest Industry Super, which purchased the office tower for $167.5 million in 2012, listed the Eclipse Tower earlier this year in May.
The 25,700sq m office building, with a 5 Star NABERS Energy rating and a 5 Green Star rating, is fully leased representing a weighted average lease expiry (WALE) of four years.
The asset is the latest addition to the Group’s Parramatta based portfolio, including its million 32 Smith street office development due for completion in late 2020.
GPT recently secured QBE as an anchor tenant for 51 per cent of its $300 million Smith Street tower.
GPT’s Matthew Faddy said the Eclipse Tower acquisition increases the Group's exposure in one of Australia’s best performing office markets.
“Parramatta’s office market already has one of the lowest vacancy rates for A-Grade office space in Australia and we continue to see strong demand for quality office space.”
“The NSW Government’s significant level of infrastructure investment around the Greater Parramatta area, which includes plans for new light rail, Metro rail and motorway connections, is set to reinforce Parramatta’s importance as Sydney’s second CBD.”
Proving its confidence in the western Sydney market, Meriton recently lodged $300 million worth of residential towers in Parramatta and Macquarie Park.
Located at 180 George Street Meriton has proposed a $229 million project that includes the construction of two (57- and 66- level) towers.
Retail landlord Scentre Group has lodged revised plans for a $492 million skyscraper to be built atop Westfield Parramatta.
Settlement of GPT's 60 Station Street is expected to occur next month.