Eureka Funds Management has settled its $170.1 million acquisition of part of the NSW Government's Parramatta Justice Precinct, which incorporates the two adjacent, freestanding properties at 160 Marsden Street and 4 George Street.
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They both have a 15 year leaseback to Government Property NSW, with the sale setting a record passing yield of 6.27 per cent for offices in Parramatta.
The sale and leaseback process was managed by Government Property NSW, through James Parry and Wally Scales of Knight Frank and Scott Gray-Spencer and Josh Cullen of CBRE.
Since 2012, GPNSW has realised in excess of $700 million through the sale of properties where ownership was not essential for service delivery.
The deals come as the Parramatta market has been one of the most actively sought after regions in Australia with recent movement including Charter Hall's acquisition of the new UWS city campus, which is due for completion in late 2016, for $220.5 million, GDI's purchase of 80 George Street for $38.7 million and IOOF's purchase of 3 Horwood Place for $25.4 million.
Knight Frank's head of institutional sales in Australia, James Parry, said the Parramatta economic climate remains positive with the prime vacancy rate of 0.8 per cent making Parramatta the tightest prime market in the country.
"This low vacancy rate has supported strong rental growth over the past two years. Tenant demand continues to increase as tenants seek rents that are comparatively attractive in locations that have established transport links and meet corporate and government decentralisation policies," Mr Parry said.
Knight Frank has also secured the property and facilities management of the Parramatta Justice Precinct offices.
In another deal, a private Sydney Investor has snapped up the Campbelltown SupaCenta, which has a mixed-use zoning in the south west growth corridor of Sydney, for $15.1 million from Fortius Funds Management's Active Property Trust No 1.
The centre, at 1 Tindall Street, comprises 6618 square metres of lettable space which sits on a 10,290-square-metre site, and was sold by Ben Stewart and Andrew Palmer of Knight Frank and Darren Zammit of LJ Hooker Commercial Campbelltown.
Knight Frank's senior executive of retail sales, Andrew Palmer, said the asset is Zoned 10 (a) under the Campbelltown LEP and has multiple re-development options including residential.
