Union Investment, the Hamburg, Germany-based real estate investment manager, has made its first office investment in Sydney with the acquisition of 155 Clarence Street for A$120 million (€76 million; $86 million).
The historic building comprises 128,865 square feet of Grade A office space and an additional 5,694 square feet of retail space. The 12-storey multi-tenant property is approximately 85 percent leased.
The property was acquired via Union Investment’s open-ended fund real estate fund Unilmmo: Global, which invests predominantly in office properties but also has exposure to hotels, retail and logistics. Eureka Funds Management advised Union Investment on the deal.
“155 Clarence Street is a perfect fit for our global fund in a new market with excellent development prospects,” said Martin Bruehl, the firm’s head of investment management, international. “The unique combination of historic art deco façade and the most contemporary space available on the market means that 155 Clarence Street is very well positioned in Sydney’s market.”
Union Investment made its first investment in Australia in April last year when it acquired an office tower in Southpoint in Brisbane at the development stage via its open-ended European real estate fund Unilmmo: Europa.
On the firm’s investment strategy, Bruehl added: “Our investments in Australia reflect the strategy we embarked on three years ago for our real estate funds: greater international exposure younger properties and broader diversification that includes strong regional markets.”
According to media reports published earlier this year in April, Union Investment plans to double its property investments in the Asia Pacific region in three to five years’ time. Its regional strategy is currently being led by Eric Cheah, who came on board in end 2013 after working as senior vice president at Pacific Star, a Singapore-based fund manager.