AEW Capital Management has purchased a Pyrmont office building for $143 million on a yield of 4.87 per cent, a significant commercial acquisition for Sydney’s fringe suburbs.
The building, located at 19 Harris Street, was purchased by AEW on behalf of its Value Investors Asia fund series, from UBS Asset Management, which managed the A-grade office tower on behalf of an overseas investor.
Thomson Reuters is the anchor tenant of the property, with L’Oreal Australia among the 12 occupants of the fully leased asset.
The building has a net lettable area of 12,568sq m and campus-style flexible floor plates of around 2000sq metres.
JLL’s James Aroney, Paul Noonan, Rob Sewell and Stuart McCann, and Colliers International’s James Barber, Adam Woodward and James Mitchell brokered the deal.
“Properties such as 19 Harris will benefit from significant rental growth in this sub-market as leases reach their expiry,” JLL national director sales and investments NSW James Aroney said.
“The high calibre of tenants, the quality of the asset and the vibrant city fringe location made it an attractive investment opportunity.”
Pyrmont, home to many high-profile technology and media companies (including Google and WeWork), has been likened to other global tech precincts including San Francisco’s South of Market, the Meatpacking District in Manhattan and East London Tech City.
Earlier this month, Developer lobby group Urban Taskforce revealed major urban renewal plans for the Pyrmont peninsular.
The vision for a mixed-use precinct that would parallel the Sydney CBD peninsular, was designed by Sydney architecture firm Lava to provide new entertainment and hospitality uses as well as being a focus for IT and creative industries.
Billed as Sydney’s next “high-rise centre”, Pyrmont could dramatically densify as Sydney pushes towards eight million people over the next 40 years, in a bid to solidify Sydney’s status as a leading global city.