Investor demand for office and industrial assets is showing no sign of slowing down with series of sales and listings worth close to $300 million dominating the Sydney commercial market.
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Charter Hall has formed a joint venture with Commercial Industrial Property (CIP) to develop an industrial land parcel of 18.98 hectares with a net developable area (NDA) of 16.97 hectares. The end value is estimated to be about $120 million.
The 90-year leasehold interest from Western Sydney Parklands Trust (WSPT) will allow Charter Hall and CIP to secure a strategic income-producing land bank in Sydney's south-west, according to Suellen Fitzgerald, executive director of Western Sydney Parklands Trust.
"The new Bringelly Road Business Hub is the third business hub that will create a long-term income stream for Western Sydney Parklands Trust. It allows the trust to manage the remainder of the Parklands."
Charter Hall's chief investment officer, Sean McMahon, added that the strategic land bank would see the group capitalise on strong growth in the south-western Sydney industrial market by developing the site.
Mr McMahon said the property is well positioned to benefit from the Western Sydney Infrastructure Plan, which is a $3.6 billion federally funded, 10-year investment plan into the region's economy.
In the Sydney CBD, the owners of two office towers are taking advantage of the strong market with 160 Sussex Street and 299 Elizabeth Street being offered for sale. No prices were disclosed but expectations could be $80 million-plus for each property.
The Sydney CBD office market has been a standout across all key indicators with its vacancy rate remaining the lowest among the national capitals, which has driven exceptional performance in capital values and rental growth, according to the latest research data from Savills.
While the most globally recognised city in Australia, Sydney CBD's investment performance differs from every other market in the country due to a single factor; its landlocked nature and lack of greenfield development sites.
With vacancy at a low of 5.9 per cent, coupled with expectations of further tightening over the next two years as net supply remains negative, rents have shown double digit effective growth over the past two years and risen to record levels.
The 100 per cent freehold interest in 160 Sussex Street is being sold through Graeme Russell, Simon Fenn and Ben Azar of Savills and Vince Kernahan, Tom O'Neill and James Barber of Colliers International, on behalf of local property investor Stephen Burcher, of the Burcher Property Group.
A private investor, who bought 299 Elizabeth Street from Mr Burcher in mid-2015, is also selling 299 Elizabeth Street, on the corner of Elizabeth and Liverpool streets, through Knight Frank's Dominic Ong, Andy Hu and John Bowie Wilson in conjunction with JLL's James Aroney and Steven Tsang.
Mr Ong, Knight Frank's head of Asian markets, Australia, said investment demand remains extremely high into the Sydney CBD. "There remains a lot of capital chasing solid assets in Australia. We are expecting interest from local and offshore buyers, including syndicates and high net worth individuals," Mr Ong said.
JLL's national director, sales & investments, NSW James Aroney said the high-profile corner is directly opposite Sydney's Hyde Park and is an appealing investment package due to its level of occupancy and diversity of income through the retail and commercial tenancies, as well as potential medium to long-term development upside, subject to relevant approvals.
