Swiss private market investor Partners Group and the Australian unit of Warburg Pincus-backed ESR have sold 73 Miller Street, an office tower in North Sydney, to Zurich-based UBS Asset Management for A$400 million ($255 million).
UBS is acquiring the asset on behalf of an undisclosed client, according to an announcement.
In 2017, the Partners Group had acquired the 1990-vintage building from Chinese conglomerate Fosun International for A$205 million ($131 million).
ESR Australia, the local unit of the pan-Asian logistics real estate giant ESR, added the 13-storey building to its portfolio following an A$723 million takeover of property management firm Propertylink in 2018. Propertylink was delisted from the Australia Stock Exchange (ASX) in 2019.
“The sale is a strong result for ESR and its partner. [The property] recently had an A$62 million ($39 million) redevelopment and repositioning completed, which involved replacing all the services and new façade, enabling the building to receive 5 Stars at the Green Star rating,” Philip Pearce, CEO of ESR Australia told DealStreetAsia.
“Following a roughly A$60 million ($38 million) refurbishment featuring an exceptional tenant profile, secure income stream and best-in-class ESG credentials, 73 Miller Street is arguably the best A-grade asset in North Sydney,” said Luke Billiau, head of office investments at JLL Australia, who brokered the deal in conjunction with fellow property company Knight Frank.
The transaction, which was completed this month, reflected a net initial yield of 4.69%, per a LinkedIn announcement by NYSE-listed brokerage firm JLL.
Following the consolidation of Propertylink’s assets and funds under management into ESR’s portfolio, ESR is reportedly looking to close some of its outstanding trusts that are reaching the end of their lifespan and offloading assets around the Sydney area, according to reports by IPE Real Assets coverage last month.