Security Capital Australia has sold 19 Foster Street, Surry Hills, to private investor Marks Henderson for $39.5 million.

Consisting of 2,123 square metres of industrial-style creative office and more than 1,000 square metres of retail/showground space, the building is set across five levels and features a dual core and internal lightwell, along with high ceilings, exposed brickwork and polish concrete floors.

The address is 100% and has a WALE of 2.25 years (as of 1 November 2018).

At a glance: 

• A five-level office building at 19 Foster Street has been sold by Security Capital Australia to Marks Henderson for $39.5 million, reflecting a yield of 4.8%.
• The sale was negotiated by Knight Frank’s Jonathan Vaughan and John Bowie Wilson, in conjunction with Karbon Property’s James McCourt and Joshua Watts.  
• The building has  2,123 square metres of industrial-style creative office and more than 1,000 square metres of retail/showground space.

The sale was negotiated by Knight Frank’s Jonathan Vaughan and John Bowie Wilson, in conjunction with Karbon Property’s James McCourt and Joshua Watts, and reflects a yield of 4.8%.

Knight Frank Commercial Sales NSW Partner Jonathan Vaughan said the property received strong interest from a number of parties.

“We had significant buyer interest throughout the campaign, reflecting the ongoing confidence in Sydney’s fringe markets and the sale demonstrates the continued outperformance of the Surry Hills market in particular," he said.

With a vacancy rate of 3%, the fundamentals in Surry Hills are some of the best in the country, underpinned by its position as the number one destination for the growing TAMI (technology, advertising, media and information) sector.”

Marks Henderson Director Chris Marks said 19 Foster Street was an opportunity to acquire an office building with a favourable lease expiry that also catered to the generational shift in the way people were working and utilising office space. 

“Surry Hills is continuing to rise in popularity amongst the creative industries and this increasing demand combined with a lack of supply has led to a drop in vacancy in the area, with an expected reversionary uplift in rents," he said.

"The refurbishment of 19 Foster Street in 2013 delivered space that not only appeals to today’s occupier but will continue to attract tenant interest within the Surry Hills market for years to come.”

Security Capital's Mark Clohessy said they were "extremely pleased" with the result.

“We identified the building in 2014 by us as being an address that provides an excellent platform to leverage the changing workplace demographics, which has proved to be the case.

"The divestment of the asset is in line with our long track record of recycling capital and our investors are very happy with the result”.

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