- An office building at 32 Phillip Street in the Parramatta CBD is being sold by Australian Unity
- It will be taken to the market via an International Expressions of Interest campaign run by Knight Frank and Colliers International
- Buyers will be attracted to potential upside through near-term upgrades and rental revision, future redevelopment potential and the location
- The building is one of very few office assets to hit the market in Parramatta over the past 18 months, following on from the sale of 9 Wentworth Street
Sydney, Australia – A PARRAMATTA commercial building with potential for a future mixed-use development is expected to be sought after by a range of buyers when it is taken to the market.
The B-grade office building at 32 Phillip Street in the Parramatta CBD is being sold by Australian Unity via an International Expressions of Interest campaign being run by Wally Scales and Graeme Russell of Knight Frank with John McCann and James Barber of Colliers International.
The property has ground floor retail and eight levels of office space with 6,759sq m of net lettable area above four upper levels of parking with 101 spaces, on a 1,151sq m site.
The building was extensively refurbished in 2013 and is fully leased to GE Capital until the end of June 2023, with a net passing income of $3.74 million per annum.
Mr Scales said buyers would be drawn to the potential upside of the property through a near-term upgrade and positive rental reversion, as well as the opportunity for a future redevelopment with the B4 Mixed-Use Zoning of the site.
“This property will attract interest from private investors, wholesale funds and family offices seeking a functional commercial building with uplift potential,” he said.
“Additionally, we anticipate possible buyers will be residential developers seeking a unique site with maximum height limit in the Parramatta CBD, with holding income in the meantime.
“In the longer term the mixed-use zoning of the site provides redevelopment prospects for an iconic residential tower in a prime part of the CBD overlooking Parramatta River.”
Mr McCann said the Parramatta building was in a prime location, in the northern portion of the Parramatta commercial precinct, in close proximity to the Church Street retail strip.
“It occupies an island site immediately adjacent the Powerhouse Museum, which is about to commence construction - with completion due in 2024 - and is Australia’s largest investment in cultural infrastructure since the Sydney Opera House,” he said.
“With the museum having up to two million visitations per annum, this location will become one of the most highly activated precincts in the Parramatta CBD.
“The proposed Civic Link pedestrian thoroughfare will connect it directly to Parramatta Square, the new Metro Station and the existing bus/train interchange.”
The latest Knight Frank Parramatta Office Market report – September 2021 found the Parramatta CBD office market was in the midst of a major transition, with unprecedented private and public investment, including Parramatta Square and the light rail project, strengthening the city’s position as an emerging CBD centre with a vibrant and culturally diverse landscape.
The research found that over the next two years the Parramatta CBD will become Sydney’s second- largest CBD by office stock size, behind the Sydney CBD.
Mr Scales said investment activity in Parramatta had been limited over the past 18 months, as with all office markets, with 32 Phillip Street one of the only office buildings to hit the market in recent times, following on from the sale of 9 Wentworth Street.
“Local and offshore private and institutional investors appreciate the Parramatta growth story and are very keen to contest any scarce purchase opportunities that become available in this tightly-held market,” he said.
“There is still a 105 basis point positive prime yield arbitrage between Parramatta and the Sydney CBD market, providing an attractive pricing spread for investors.
“New quality stock and improved infrastructure will help reinforce Parramatta’s profile as an attractive investment destination for both local and offshore investors.”
The Expressions of Interest campaign for the property will close at 4pm on Thursday, November 16.