News Corp Australia
14 Jun 2021
The Australian Business Network
Australian-Korean investment and fund manager Inmark Asset Management is moving to capitalise on global demand for long-leased office assets by putting the national Woolworths headquarters in Sydney’s northwest on the block for more than $400m.
The move comes amid an exodus by Korean investors who are selling off commercial properties they bought up earlier in the property boom for steep profits, with the pandemic only trimming returns, as buyers are still snapping up suburban buildings.
Other players have already capitalised with another Korean group of investors, represented by AIP Asset Management, selling a $780m portfolio of four buildings to the acquisitive Charter Hall last month.
A group of South Korean investors advised by Inmark picked up the Woolworths headquarters in Sydney’s northwestern suburbs in a landmark deal worth $336.45m in 2016.
The property is considered the trophy asset in Inmark’s global office core portfolio, which comprises about $US3.25bn of assets across Australia, the US, Europe and Korea.
The sale is the largest Sydney suburban office on offer since 2019, when Parramatta’s Jessie Street Centre traded for $415m to Charter Hall and Singaporean sovereign wealth fund GIC and Chatswood’s Zenith Centre was acquired for $438m by Starwood Capital and Arrow Property.
Inmark has appointed James Parry, Flint Davidson, Stuart McCann and Michael Andrews of CBRE and Adam Woodward, James Mitchell and James Barber of Colliers to steer the sale of the 44,911sq m Woolworths campus.
The campaign is expected to generate significant interest from both domestic and offshore buyers, underpinned by the property’s long-term income derived from the supermarket giant.
The 1 Woolworths Way, Bella Vista property is positioned on nine hectares of land and comprises three separate office buildings, linked by a central atrium.
There is also about 28,000sq m of commercial office floor area available to be further developed under a master plan.
The architecturally designed campus offers large, efficient floorplates spanning more than 3,000sq m, an on-site Woolworths Metro supermarket, a gym, cafe, sporting facilities, a significant data centre and more than 3,000 car spaces. It has a weighted lease term of ten years from November 2021.
“The weight of capital seeking secure, long-term income streams has doubled over the past 12 months, with a heavy influence from offshore domiciled investors looking to Australia as a safe haven given our strong economic performance,” Mr Woodward said.
“Non-discretionary food-based and every day retailing in Australia has boomed throughout the COVID-19 pandemic, and Woolworths has significantly outperformed the ASX 20 during this time, highlighting the strength of the covenant,” Mr Woodward said.
CBRE’s James Parry said the quality of the asset and its significant on-site infrastructure and amenities would be key investor drawcards, with the property recognised as one of the leading office campuses in Australia. “The asset is situated in the strategic North West Priority Growth Area, encompassing one of Sydney’s largest working populations,” Mr Parry said.
“It is positioned to capitalise on the newly opened Sydney Northwest metro line and the heightened focus on hub and spoke locations such as Norwest/Bella Vista, which offer high quality office accommodation, relative affordability and multiple transport options.”