Melbourne private investor Marks Henderson has expanded its Sydney portfolio with a high profile $92.75 million office acquisition in Darlinghurst.

Mercer Property’s Tom Speakman and Matt Davoren teamed with CBRE’s Harry George to negotiate the sale of 19A Boundary Street on behalf of fund manager Haben Property Group.

The sale was struck at an initial yield of 4.7 per cent and a build rate of $14,300/square metre.

At a glance: 

• An office property at 19A Boundary Street, Darlinghurst has sold for $92.75 million to Marks Henderson in a deal negotiated by CBRE's Harry George, in conjunction with Tom Speakman and Matt Davoren from Mercer Property.
• The sale price represents an initial yield of 4.7 per cent and a build rate of $14,300/square metre.
• The fully leased Boundary Street building offers a total lettable area of 6,480 square metres and is home to notable tenants such as creative agency Collider and celebrity chef Donna Hay.

The converted warehouse represents the latest Sydney investment for Marks Henderson, following the group’s March acquisition of 19 Foster Street, Surry Hills for $39.5 million.

Director Chris Marks said the acquisition was aligned with the company's previous purchases.

“The 19A Boundary Street acquisition continues our theme of buying character buildings which are well-positioned and appeal to creative and edgy tenants in the technology, advertising, media and information sectors," he said.

The fully leased Boundary Street building offers a total lettable area of 6,480square metres and is home to notable tenants such as creative agency Collider and celebrity chef Donna Hay.

Source: CBRE

It includes a ground floor retail showroom and secure parking for up to 51 vehicles.

Mr George said the sale campaign generated strong local, interstate and international buyer interest from both high net worth private investors and fund managers.

“Key drawcards included the building’s location, scale and unique attributes, including its substantial parking allocation, high ceilings, natural lighting, balconies and 360-degree views," he said.

"The property is also extremely well-positioned to cater for next generation tenants focused on ‘live, work and play’ locations that meet the needs of a growing millennial workforce.”

The low supply and high demand for this style of space have pushed the office vacancy rate in Sydney’s city fringe market to circa 3 per cent, the lowest rate of any commercial market in Australia.

Mercer Property’s Mr Speakman said this trend underpinned interest in assets like 19A Boundary Street, which offered strong fundamentals and a diverse tenancy mix, with the Boundary Street building home to 53 tenants.

“The property also offers significant upside, with scope for a considerable uplift in the existing rents and potential for a variety of future exit strategies,” he said.

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