Mapletree Marketing Pair of Sydney Office Blocks as Fund Wind-Down Continues

Singapore’s Mapletree Investments has put two Sydney office properties up for sale, as the Temasek-controlled manager continues to wind down a 2019-vintage Australia commercial fund after a string of loss-making exits.

The company is seeking buyers for 111 Pacific Highway in North Sydney and 118 Talavera Road in Macquarie Park, with the sales campaigns following Mapletree Australia Commercial Private Trust’s recent disposal of Brisbane’s 144 Montague Road at a discount to the asset’s acquisition price.

“Mapletree continuously monitors the market for suitable investment and divestment opportunities,” a Mapletree spokesperson told Mingtiandi on Friday. “As MASCOT approaches fund maturity, it is now an opportune time to explore potential divestment opportunities for its assets.”

Knight Frank and CBRE are marketing 111 Pacific Highway, a Grade A office tower in the core of North Sydney’s CBD. The 18,346 square metre (197,475 square foot) building occupies what the brokers describe as North Sydney’s only true commercial island site, with frontages along Pacific Highway, Walker Street and Hill Street.

Recent Upgrades

The 24-storey property is positioned between Victoria Cross metro station and North Sydney railway station, with the brokers pointing to 43,000 square metres of stock withdrawal in the precinct as supporting tenant retention and rental growth.

Mapletree said recent upgrades at 111 Pacific Highway included repositioning one floor into six premium smaller suites with shared boardroom and meeting facilities, targeting demand from small and medium-sized businesses. Those enhancements, together with the opening of Victoria Cross metro station, helped the asset secure 5,000 square metres of new and renewed leasing deals over the past year, the spokesperson said.

In Macquarie Park, Knight Frank and Cushman & Wakefield are marketing 118 Talavera Road, a Grade A office property opposite Macquarie University and Macquarie University Hospital. The six-storey building comprises 11,658 square metres of net lettable area across 2,043 square metre floorplates, with a weighted average lease expiry of more than five years.

A government-linked covenant accounts for 46 percent of income at the asset under a 10-year lease, with Mapletree saying the deal covers 45 percent of net lettable area following upgrades to the lobby, bathrooms and end-of-trip facilities.

The expressions-of-interest campaigns are being run on staggered timetables, with bids for 118 Talavera Road due on Wednesday 17 June, followed by the close of 111 Pacific Highway a week later on Wednesday 24 June.

MASCOT Markdowns

The sales push comes less than two months after Mapletree agreed to sell 144 Montague Road in South Brisbane to Acure Asset Management for A$83 million ($58 million), marking at least the third money-losing exit from MASCOT.

The Brisbane deal followed Mapletree’s disposal of 417 St Kilda Road in Melbourne last September at a reported price of over A$90 million, or more than one-third below its 2017 purchase price, and the January sale of 78 Waterloo Road in Macquarie Park to Growthpoint Properties for A$101 million, also below Mapletree’s entry price.

Across the three transactions, Mapletree has exited assets acquired for a combined A$343.7 million at materially lower values, reflecting a repricing of office assets as higher interest rates and hybrid-work trends weigh on demand, even as the spokesperson said rising construction costs are expected to limit new supply and support investor interest in well-positioned assets.

MASCOT launched in 2019 after Mapletree raised A$654 million in equity for a closed-end vehicle seeded with 10 Grade A properties valued at A$1.4 billion across Sydney, Melbourne, Adelaide, Brisbane and Perth. The fund’s remaining properties include 1G Homebush Bay Drive in Sydney and 11 Waymouth Street in Adelaide, according to the fund’s website.