MGPA to spend $109m on Sydney office-retail building
21 Sep 2012
MGPA has, on behalf of MGPA Asia Fund III, successfully agreed on the acquisition of 6-10 O'Connell Street, for A$105.1m ($109m). The transaction is still subject to FIRB approval.
The landmark Grade B office building has a total net lettable area of about 16,000 square metres of office and retail space, comprising 26 levels of office (14,601 sqm) and ground floor of retail. It is strategically located in what is commonly known as the ‘Golden Triangle', Sydney's most prestigious business precinct.
John Saunders, CEO Asia, MGPA, said, "This B-Grade property is located in the prime Core precinct of Sydney's CBD, an area which we forecast will maintain its premium standing. The area has had strong leasing history and we see this acquisition as a wonderful opportunity to do what MGPA does best, repositioning a lower grade asset in a great location to grow income and drive value."
The current occupancy is 92%, comprising 38 office and six retail tenants. Anton Capital and Clifford Chance advised MGPA on the acquisition.
MGPA is planning to invest in a substantial refurbishment and will be focussing on the smaller occupiers, currently less-catered for in the Core precinct of Sydney, and this "buy fix" transformation is at the heart of MGPA's Fund strategy, according to Hamish MacDonald, Director - Capital Transactions, Australia. "We see significant opportunities in major cities in Australia for well-located B-Grade properties which are at a widening discount to their surrounding Grade A buildings."
Author: by Penny Leung