This property delivered a total equity IRR of 64%.
343 George Street was aquired in July 2009 for $55 million and sold 12 months later for $78 million.
The high quality landmark commercial building in Sydney's CBD was one of two properties forming the western boundary to the prestigious Martin Place, comprised ground floor retail and 10 floors of office space. The property displayed current vacany with occupancy at 89% and near term vacany risk in relation to the ground floor retail and significant under-renting. This presented a strong opportunity to create value through improving the properties occupancy, WALE and income.
Abacus began searching for a high quality retail tenant to lease the historic retail space and ultimately chose high end fashion house Burberry for their flagship Sydney store. The lease included the ground floor retail and the whole vacant level 4 on 15 year leases, improving the WALE and occupancy to over 7 years and 96% respectively. Ground floor rent more than doubled helping the asset yield improve to 9.4% from 7.1% at acquisition.
Following the Burberry lease, significant investor interest resulted in a sale of the property for $78 million in August 2010. The sale illustrates Abacus' ability to identify value gaps and take advantage of different market conditions and add value by improving tenancy profile.
|Acquisition price||$55 million|
|Sale price||$78 million|
|Capital uplift||$23 million or 42%|
|Net lettable area||10,204m2|