Diversified property group, Mirvac, has snapped up an A-Grade twin office tower at 75 George Street, Parramatta in Sydney's West from property fund manager and investor CorVal for $86.3 million.
The 9568 sqm six-level property is fully leased and major tenant St George Bank occupies 68% of the building. It has a net annual passing rent income of $4.8 million.
The acquisition is Mirvac's foot in the door into the highly competitive Parramatta office market, which due to it growth as the Sydney second CBD has no vacancy in prime grade office space.
Mirvac joins the slew of international commercial property investors and developers including Walker Corporation, GPT Group and Coombs Property Group flocking to the suburb to gain exposure to its office market. "This acquisition provides us with exposure to the Parramatta CBD market, which has been one of the strongest performing markets nationally, with a prime vacancy rate that has averaged below 3% for the past decade," said Mirvac's head of office and industrial, Campbell Hanan. "This acquisition is well-timed to capitalise on $10 billion in committed infrastructure investment underway, which will transform Parramatta into a second Sydney CBD with significant scale."
CorVal bought the underdeveloped tower in 2012 for just over $32 million and it has just obtained approval to add another two floors of 2600 sqm office space to the building. The property comes with a scheme to redevelop the building into a 36-level tower on a 2668 sqm site. While underdeveloped, its ground-floor foyer has been upgraded and there is a fully refurbished fifth floor. The gave Mirvac the opportunity ti develop a new landmark commercial office tower, Mr Hanan said. "This acquisition sits within Mirvac's directional mandate to acquire assets in key urban locations and highlights our capacity to source and secure core assets with future development opportunities," he said.