23 July 2014
Property investment and asset management company, Propertylink, has added to its recent spate of purchases with the acquisition of a four level commercial and warehouse building in Sydney’s burgeoning North Ryde for $34 million.
The property at 15 Talavera Road, Macquarie Park, is the first business park purchase by Propertylink Australian Industrial Partnership (PAIP) and will undergo a $5 million refurbishment during the next 12 months.
Commenting on 15 Talavera Road Propertylink Managing Director Steve Day said: “The property had a long history of institutional ownership and, with the yield gap between core prime assets and secondary assets at historical highs, we see this as an ideal time in the cycle to acquire this asset.”
“The Propertylink team has a long track record of repositioning assets of this nature and we expect to achieve strong total returns for our investors after the asset is repositioned.”
The 24 year old property has a net lettable area of 12,892 square metres, of which 90 per cent is commercial. It includes floor plates of about 3,000m2.
It is located close to the high traffic Macquarie Park railway station and Macquarie Shopping Centre, which is undergoing a $440 million redevelopment that will result in Sydney’s largest suburban shopping centre.
15 Talavera Road is also one of the few commercial properties in the area that contains warehousing facilities.
Tenants include Mars, BSI Group, process management group Emerson, clinical research company Parexel International and medical technology distributor LifeHealthcare.
Propertylink Head of Property, Peter McDonald, said the upgrade to reposition the property would include foyer and lift upgrades, floor by floor refurbishment and external works to improve the entry.
“Once completed, we are targeting a fully let yield of 12.3 per cent” Mr McDonald said.
“We expect that tenants will be attracted to the building due to the efficiency of the large floor plates and the excellent parking ratio of 1 space per 25m2.
“The parking code for new buildings in Macquarie Park is half this ratio, providing us with a competitive advantage in a market where the majority of occupiers prefer to drive to work.
“Furthermore, the economic rent required to justify new developments in North Ryde is around $350 per square metre, compared to targeted net rents in the repositioned 15 Talavera Road, which will be below $300 per square metre,” Mr McDonald added.
So far this year PAIP has purchased 16 properties for a combined $226 million, boosting the total value of the Australia-wide portfolio of industrial assets portfolio to $260 million. PAIP has the strategic intention and is funded to grow to around $600 million.
The vendor of 15 Talavera Road was AMP Capital Funds Management Ltd and the transaction was brokered by Graham Russell and Michael Brislane of Savills and James Parry of Knight Frank.