Aqualand bought 132 Arthur Street for nearly double the price paid for it in 2014
Transplanted mainland developer Aqualand has purchased a 16-storey office tower in North Sydney for a reported A$70 million ($53 million), according to a story in The Australian. The acquisition and Aqualand’s apparent intent to hold the property as a revenue generating asset, make the company the latest in a series of Chinese developers to take aim at the Australian commercial real estate market,
Aqualand, which is the Australian subsidiary of Shanghai-based Shenglong Investment Group, bought the 16-level tower at 132 Arthur Street with a major tenant signed up through 2024, signifying the company’s willingness to operate the building for leasing revenue rather than to convert the property for residential use.
The shift into office investment is a departure for Aqualand, which in a few short years has become one of Sydney’s most prolific homebuilders. The acquisition of the B-grade property places the developer together with state-run Poly Real Estate and financial giant Bank of China among Chinese investors in Australia’s office sector since the beginning of September.
Local Investor Doubles Money in Two Years
Aqualand purchased the circa 1976 office tower from fund manager Centennial Property Group which had acquired the property from Blackstone-controlled Valad Property Group in late 2014 for A$37 million. The property has 14 floors of office space, a net lettable area of 7,878 square metres and occupies a 1,067 square metre site.
According to current listings for offices available in the building, asking rentals are between A$620 to A$670 per square metre per year, while grade B space in the city averages A$585 to $785 per square metre per year, according to a recent report by Savills.
On its website, Centennial touted the building as possessing “a number of future conversion options including a full refurbishment or redevelopment as serviced apartments.” A number of developers have been purchasing older office buildings in Sydney for conversion into residential space as the city’s condo market continues to boom.
Chinese Developers Head into Offices
Shenglong chairman Lin Yi has now built a portfolio across China, Australia and the US
Aqualand’s acquisition comes just one month after Poly Australia, Shanghai-listed Poly Real Estate’s Australian arm, announced that it was on the lookout for A-grade office investments in Melbourne’s CBD. That news came less than two months after the state-run developer purchased a pair of buildings near Sydney’s Circular Quay for A$160 million ($121.6 million) with plans to develop them into a new A-grade office tower.
Poly’s Melbourne decision came the same week that Bank of China paid Deutsche Asset Management’s RREEF Real Estate A$130 million ($100 million) to buy a 14-storey office building in Sydney, which the big four mainland bank will use to house a new and larger headquarters in Australian city.
In July Aqualand, which is operated by the son of Shanghai-based Shenglong founder Lin Yi, bought two Sydney commercial sites for a combined A$194 million, with plans to redevelop both of those projects for residential use. The developer is also part of a consortium bidding for a $1.35 billion mixed-use project in Sydney’s Barangaroo area and has made multiple acquisitions in California.
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