Roxy-Pacific sells Clarence Street, Sydney office block for $153 million

The Singaporean developer and hospitality group Roxy-Pacific has sold an office building in Sydney’s CBD for $153 million.

In an aftermarket filing on Friday, Roxy-Pacific says the sale WAs subject to the findings of a due diligence exercise and the approval of both parties’ boards of directors.

Its 117 Clarence Street purchaser is an Australian-domiciled institutional investor whose name was not disclosed.

Roxy bought the 11-storey property at 117 Clarence Street from Altis Property Group in 2015 for US$81 million ($108.1 million) with the Tong Eng Group.

The building is 100% occupied with a net lettable area (NLA) of 12,517 sq m, and a weighted average leasehold expiry (WALE) by income of 2.6 years.

The impact of recent stock withdrawals for residential conversion had led to unprecedented demand for B Grade office space in the Sydney CBD, according to recent research from Savills Australia, who noted the subsequent spike in rents.

Savills noted Sydney’s Western Corridor was a precinct that is undergoing a "vast transformation" both commercially and culturally.

The precinct is fast becoming a regional centre for Asia Pacific’s financial services leaders as well as offering an array of small bars and fine dining options, it noted.

Positioned 120 metres from Wynyard Station and Bus Interchange, 117 Clarence occupies a large corner site of over approximately 1,231 sqm.

The building has undergone a series of capital upgrades including advancements in the lift rides and door mechanisms as well high quality end of trip facilities (bike racks, showers and change rooms).

The property was listed for sale through Simon Fenn, Ian Hetherington and Ben Azar of Savills Australia and Richard Butler, Josh Cullen and Steven Kearney of Inc RE.

About 60 per cent of leases within the building expire before 2020 and 41 per cent of income is underwritten by Government. The building has a 4.5-star NABERS Energy rating.