close
close

Centuria banks premium at its South Sydney office

The South Eveleigh office was valued at $115 million in 2022.

Centuria has sold the second of three inner-city South Sydney offices acquired eight years ago to establish the privately held ATP (or Australian Technology Park) Fund.

The manager is once again turning a profit: 1 Central Avenue, South Eveleigh, collects $103 million, a significant profit on the $40 million it paid.

Also known as the Biomed Building, developed in 1998 with 7,705 square meters over five floors, the University of Sydney is the anchor – with 90 percent.

It has a vacancy rate of 2.9% with a weighted average lease term of 6.6 years.

There are also 32 parking garages.

Decrease on book value 2022

Two-year-old local investment house and developer Kurraba Group, which represents a private investor, is purchasing 1 Central Ave.

Rebus Property agent Scott Timbrell closed the off-market deal at last year’s book value.

However, the result falls short of the June 2022 estimate of $115 million, which assumed a capitalization rate of 4.88%.

Centuria has committed $103 million to the ATP fund’s three assets (story continues below).

Last year it sold the smallest – Redfern’s historic clock tower – for $18.25 million, significantly more than the $3.3 million it spent before the renovation.

The final building – also the largest and most expensive – is the Data61 building at 13 Garden Street, South Eveleigh.

It was developed in 2010 on 1.72 hectares, of which 11,206 sqm was let to the CSIRO, Ministry of Defense and Seven, among others, and was reported to be valued at $138 million in mid-last year – a maximum interest rate of 5.5%.

If sold at or above that amount, fund investors will have enjoyed a total return of more than 300%.

The average annual distribution return was a high 15%, Centuria added.

“We have acquired three office buildings in South Eveleigh for the ATP Fund, on the eve of the area’s regeneration,” said Jesse Curtis, Head of Funds Management at Centuria.

“As one of the first institutions to support the district, our investors have since benefited from the significant social and commercial infrastructure in the area,” he added.

“The market edge location has developed into a thriving hub for large and medium-sized businesses, offering easy mobility and lifestyle amenities,” he said.

Subscribe to our newsletter at the bottom of this page.

Share or recommend the article