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Orchard acquires 280 George Street in line with Sydney office growth strategy
20 February 2008
Orchard Funds Management today announced the acquisition of 280 George Street, Sydney for $49.2 million. Orchard’s Commercial Office Fund (the Fund) will hold 50% of the asset. The other 50% will be held by the Orchard Diversified Property Fund.
Commenting on the acquisition, Orchard CEO David Hinde said “I believe the prime position of 280 George Street and the nature of the property make it ideal to continue to take advantage of the upward leasing movement we have recently witnessed in the Sydney CBD, and also the growth in the office market.”
280 George Street is a recently refurbished, well maintained 13 level office building located in the heart of Sydney’s financial core precinct on the prominent corner of George and Hunter Streets. The building is occupied by a number of quality tenants, from a diverse range of sectors and industries.
With the Sydney office market growth identified as continuing over the next five years, this latest acquisition demonstrates the Fund’s strategy to increase exposure to the Sydney office market. In the past four months, the Fund has actively targeted this market acquiring 85 Harrington Street and now 280 George Street, whilst decreasing its exposure to the Brisbane office market by divesting both 40 Tank Street and 369 Ann Street late last year.
Fund Manager for Orchard’s Commercial Office Fund, Brad Dichiera commented “The Fund is well positioned to capture the rental growth coming through from our exposure to both the Perth and Sydney markets, which should see a continuation in the strong performance the Fund has delivered investors over the last two years.”
The Fund now holds approximately 40% of its assets in Sydney. This latest acquisition further strengthens the Fund’s portfolio which already includes exposure to A-grade Sydney office buildings such as 35 Clarence Street and 233 Castlereagh Street. The Fund has $626 million (as at 31 December 2007) of assets under management and boasts a strong tenant mix with a balanced lease expiry profile. The Fund’s unit price increased during the December quarter to $1.2516, representing a 13.5% increase in the unit price for the year and has provided a total return of over 20% per annum over the last two years (to 31 December 2007).