Sunsuper has partnered with Mirvac by acquiring a 49 per cent interest in the landmark heritage conversion of the Locomotive Workshop in South Eveleigh. The transaction simultaneously exchanged and settled on the 6th of August for A$231 million, representing a 4.7 per cent cap rate.
The Colliers Capital Markets team of Adam Woodward, James Barber and James Mitchell and Knight Frank’s Ben Schubert, Paul Roberts and Graeme Russell advised Mirvac on this successful partnership with Sunsuper.
“We are delighted to have advised on the partnership between Mirvac and Sunsuper, The Locomotive Workshop offers a truly rare commercial opportunity in Sydney’s burgeoning fringe office market,” Adam Woodward of Colliers says. “The site is a unique heritage conversion offering world-class amenities and located in the Central to Eveleigh rail corridor, which will benefit from the NSW Government’s $10.4 billion rail infrastructure investment that is currently underway.”
The Locomotive Workshop is a “groundscraper” site comprising a 31,000 sqm state-of-the-art refurbishment, re-purposing the old locomotive sheds into cutting edge office and retail accommodation. These highly sought-after office and retail tenancies were 97 per cent pre leased prior to completion, with 43 per cent of the NLA pre-committed to fin-tech company Quantium.
“Quantium has moved its operation from Sydney’s CBD to South Eveleigh to take advantage of the impressive range of amenities and unique office space offered by the Locomotive Workshop. It provides their workforce with an exciting environment focused on optimal employee experience, whilst also achieving cost benefits in the process,” Mr Woodward says.
Ben Schubert of Knight Frank added “Demand for Sydney Fringe office investments has remained strong in spite of the pandemic, with investors seeking to acquire assets in emerging locations that are set to benefit from infrastructure improvements and that are known to attract tenants from the growing technology sector and wider creative industries.”
“With markets like South Eveleigh now attracting larger tenants with stronger covenants, investors are looking beyond the traditional CBDs to bolster their office holdings and this is resulting in a narrowing of the difference in capital values between CBD and fringe assets.” Mr Schubert says.