Sydney – 55 Mentmore Avenue Roseberry

Realising the investment’s full potential without incurring the costs and uncertainties associated with the repositioning process.

Location

Sydney NSW

IRR

9.10%

CAPITAL GAIN

16.45%

Original Strategy

We are pleased to present an investor report detailing the successful purchase, repositioning, and sale of a prime property asset. The property, a 5-storey office building, spans an impressive 5,316 square meters of Net Lettable Area (NLA) and features 45 basement and 10 on-grade car parking spaces. Situated on the prominent corner of Mentmore & Morley Avenue, the property is nestled on a spacious 2,931 square meter site, providing an excellent foundation for a compelling investment opportunity.

The property’s value-add potential is a key highlight, with a short-term Weighted Average Lease Expiry (WALE) of only 1.0 year, a 32% vacancy rate, and remarkably low average passing office rents of $350/sqm gross (inclusive of parking). These factors present a compelling opportunity to reposition the property and optimize its rental income in line with market rates.

Additionally, the property boasts strong locational characteristics, positioned just 150 meters away from Botany Road and directly opposite “The Cannery,” a thriving retail and Food & Beverage (F&B) asset. This prime location ensures excellent visibility and accessibility for potential tenants, further enhancing the investment appeal.

 

The Journey

The journey began with the development of a compelling concept and repositioning plan for the building, aimed at maximizing its potential in the market. However, the onset of the Covid-19 pandemic brought about a shift in the thinking of commercial office occupiers, necessitating a strategic adaptation to meet their evolving needs.

To align with the changing market dynamics, we modified the repositioning plan from targeting multiple occupants to a single whole building concept. This adjustment ensured that the property would cater to the preferences and requirements of post-pandemic office occupiers.

With the modified concept and strategy in place, we proceeded to market the property to find a suitable occupier. The diligent efforts resulted in attracting the interest of an ASX listed company that expressed a strong desire to own the property rather than rent. This alignment of interests and the company’s commitment to a long-term occupancy arrangement made them an ideal candidate.

Leveraging the interest and commitment of the ASX listed company, we successfully sold the property prior to commencing the repositioning work. This strategic decision proved to be prudent, enabling us to realize the investment’s full potential without incurring the costs and uncertainties associated with the repositioning process.

Our approach

The property must make sense. There needs to be a sensible plan to achieve the projected outcomes. If it has good bones, is in a great location, and has multiple options to achieve the requisite returns then we’re interested.

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© Eagle Property Group. ABN 9915 9438 623 All Rights Reserved. The references to ASIC and APRA above do not in any way intend to show or infer that Eagle Property Group has been endorsed, is associated with, or approved by either of these bodies. Eagle Property Group operates under Australian Financial Services Licence (AFSL) no. 402998. This AFSL is held by Crest Funds Management Pty Ltd, a company wholly owned by the shareholders of Eagle Property Group. By virtue of the AFSL, Eagle Property Group is regulated by the Australian Security and Investments Commission. Site made with love by Orange Bicycle