[+] Top 10 Office Transactions of 2022-23

Transaction volumes have slumped as valuation corrections wash through the office market and listed funds write down assets. MSCI Real Capital Analytics head of real assets research Ben Martin-Henry says he is expecting an increase in transaction activity at the end of 2023, but a gap between buyer and seller price expectations is throwing a spanner in the works. MSCI’s price expectations gap indicator data shows the gap in Sydney office is 30 per cent, between what buyers want to pay, and what asset owners are willing to sell for. Martin-Henry says it’s likely that they will meet in the middle at around 15 per cent discount, well below the forecast 20 per cent mooted earlier this year. “We’re not seeing a lot of transactions as a result of that gap,” Martin-Henry said. “I do expect to see more transactions at the end of the year. “Australia has been lagging other markets, it will be interesting to see the recovery profile in the next six months.” Martin-Henry says transaction volumes are significantly down on previous years across the board. “We’ve seen a bit more movement in the market in terms of transactions, some good, some bad,” he says. “Transaction volumes are down 50 per cent on the five-year average. It’s the worst results since 2011. Over the last three years as a property economist it’s been a nightmare. “It’s taking a lot of time to get deals through, between 9 and 12 months, particularly in office. “Office values really started declining in September last year. Sydney CBD office and secondary office are the worst performing markets. Prime office is holding on reasonably well.” MSCI Real Capital Analytics data shows the top 10 office transactions for the last financial year were predominantly in Sydney. Canberra’s resilient office sector also featured in the top 10, with just one asset in Melbourne, and another in Perth. Colliers’ senior executive, capital markets, Lucy Mallick says there are some emerging green shoots in the office market. “Australia’s relatively stable economy and population growth has secured the nation’s position as a target for foreign capital targeting long-term growth prospects,” Mallick said. “Unlike historical patterns during times of economic turbulence, office leasing and capital values are not currently aligned, and occupier demand for prime quality office spaces will support recovery of capital values.” 1. 60 Margaret Street, March 2023 Address: 60 Margaret Street, Sydney Building: 39-storey tower, 46,324sq m Buyer: Ashe Morgan JV with Mitsubishi Estate Seller: Mirvac and Blackstone Price: $820 million Price per square metre: $17,702 Cap rate: 5 per cent Agent: Cushman &amp; Wakefield, JLL 2. 367 Collins Street, April 2023 Address: 367 Collins Street, Melbourne Building: 33-storey tower, 37,162sq m Buyer: Not listed Seller: Mirvac Price: $400 million Price per square metre: $10,674 Cap rate: 6.6 per cent Agent: Cushman &amp; Wakefield, CBRE 3. Hunter and Pitt, March 2023 Address: Hunter and Pitt St, Sydney Building: 5 buildings up to 10 storeys, 12,000sq m Buyer: Milligan Group Seller: - Price: $400 million Price per square metre: $33,334 Cap rate: - Agent: Cushman &amp; Wakefield 4. 73 Miller Street, September 2022 Address: 73 Miller Street, Sydney Building: 13-storey tower, 19,114sq m Buyer: UBS Seller: Partners Goup JV ESR Cayman Price: $400 million Price per square metre: $20,928 Cap rate: 4.7 per cent Agent: JLL, Knight Frank 5. 383 Kent Street, July 2022 Address: 383-395 Kent Street, Sydney Building: 12-storey tower, 17,982sq m Buyer: Charter Hall Group Seller: Dexus Price: $385 million Price per square metre: $21,411 Cap rate: 5.3 per cent Agent: McVay Real Estate, Cushman &amp; Wakefield 6. 23 National Circuit, September 2022 Address: 23 National Circuit, Canberra Building: 6-storey building, 32,999sq m Buyer: Charter Hall Group Seller: Doma Group JV Goodwin &amp; Kenyon Price: $370 million Price per square metre: $11,212 Cap rate: 4.2 per cent Agent: Colliers International 7. Geoscience Complex, October 2022 Address: Geoscience Complex, Canberra Building: 3 buildings, 32,658sq m Buyer: Charter Hall Long Wale REIT, Charter Hall Infrastructure REIT Charter Hall Group JV Seller: Real IS AG Price: $363.5 million Price per square metre: $11,130 Cap rate: 7.4 per cent Agent: JLL, Colliers International 8. Arthur Young Building, December 2022 Address: 83-95 Clarence Street, Sydney Building: 19-storey tower Buyer: NSW government Seller: State Super Price: $362 million Price per square metre: $19,053 Cap rate: - Agent: - 9. BankWest Tower, December 2022 Address: 108 St Georges Terrace, Perth Building: 52-storey tower, 39,358sq m Buyer: Lendlease JV Realside Seller: Brookfield AM Price: $339.8 million Price per square metre: $8632 Cap rate: 7.4 per cent Agent: JLL, CBRE 10. ATO HQ, January 2023 Address: 21 Genge Street, Canberra Building: Two 10-storey buildings Buyer: Charter Hall Group Seller: Real IS AG Price: $290 million Price per square metre: $6744 Cap rate: 7.3 per cent Agent: Knight Frank, Cushman &amp; Wakefield * Multiple asset office portfolio transactions were also recorded during this period. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Top 10 Office Transactions of 2022-23

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