K Wah Group may be the latest Asian investor to buy into Sydney’s heated commercial property market, as the Hong Kong-based property firm is reportedly poised to pick up a grade A office tower in the city’s financial district for A$190 million ($145.7 million).
A deal has not yet been announced, but K Wah is “well-placed” to make the purchase, according to a report in The Australian, citing sources. The 16-storey tower has been put on the market by property investment firm TH Real Estate, which has also fielded offers from Hong Kong toy tycoon Francis Choi, as well as Sydney-based investment groups AMP Capital and Anton Capital.
Spokespersons for TH Real Estate contacted by Mingtiandi were unable to confirm the reported sale of the building at the time of publication.
The 1998-vintage building at 20 Hunter Street is located in downtown Sydney, nearby Wynyard Station, and offers 9,895 square metres of prime office space along with ground-floor retail and a basement car park. Tenants include investment advisory firm Alceon, investment bank CLSA, property consultancy Napier & Blakeley and law firm Swaab.
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London-based TH, an affiliate of Nuveen – the investment management arm of US financial services giant TIAA – acquired the tower in 2013 for around A$96 million, marking the company’s Australian debut. The firm hired Inc RE and Colliers International to sell the property in August.
K Wah, chaired by casino tycoon Lui Che-woo, has a portfolio of office, hotel, residential, serviced apartment and arcade properties that spans Hong Kong, mainland China, Southeast Asia and North America. It is not clear whether the group’s Hong Kong-listed property arm, K. Wah International Holdings, is involved in the Sydney deal.
The developer most recently made headlines when it won Hong Kong’s final government land auction of 2016, buying a residential parcel at the former Kai Tak airport site for HK$5.87 billion ($756.9 million). Just over one year ago, Lui bemoaned the challenges of acquiring new projects in Hong Kong after losing 16 straight site bids, primarily to mainland competitors.
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With investment yields under pressure in mainland China and Hong Kong, international investors are chasing over A$1.9 billion ($1.46 billion) in towers across Sydney, lured by surging office rents and acute tenant demand. Singapore’s Ascendas-Singbridge made its second office purchase in Australia by picking up 66 Goulburn Street, a landmark office tower in downtown Sydney, for A$252 million ($200 million) in August, beating out competing bids from other international groups.
This past May, Malaysia’s second-largest pension fund sold the Exchange Centre office tower in downtown Sydney to an unnamed Hong Kong family office for about AUD$340 million ($253 million), setting a new record for grade A office buildings in the country.
Transplanted mainland developer Aqualand bought a 16-storey office tower in North Sydney for a reported A$70 million ($53 million) last October, according to The Australian.