JLL sells and leases Sydney office for benchmark pricing

SYDNEY, 28 September 2022 – A premium strata office has sold for a building record, and subsequently also leased for a building record, in an amalgamation of the demand for strata assets and high-quality fitted office premises.

JLL’s Capital Markets NSW Associate Director, Willem Watson sold the property on the fifth floor of 261 George Street, Sydney prior to auction with vacant possession, achieving a rate of $20,627 per sqm and representing a benchmark for the precinct.

Mr Watson said, “This sale comes hot on the heels of a surge in activity for Sydney strata offices following a number of record-breaking transactions taking place in the CBD. This opportunity appealed to a wide range of investors and future owner occupiers, and we received 10 requests for contract of sale following 26 inspections of the asset.

JLL’s Office Leasing NSW Senior Executive, William Conry then leased the office space prior to settlement, achieving a record rate for the building of $1,200 per sqm.

Mr Conry said, “Level 5 of 261 George Street presented a remarkable opportunity to occupy a modern, turnkey fitted floor which is perfectly configured to provide either a whole floor premises or two suites.

“This highly sought-after office space caters to office users from 110sqm - 193sqm up to 339sqm, and as a result we received demand from a large pool of tenants. It was quickly leased due to the high-quality nature of the fit out and amazing CBD location.

“We’re seeing very strong demand for high-quality premises from tenants across all size cohorts, and a good portion of the tenant briefs in the market this year (42%) have had a preference for an existing fit-out,” said Mr Conry.

Mr Watson said, “Quality spaces have become the zeitgeist of the return to the office, as organisations seek to enhance the employee experience.

“With $27 million of underbidder capital for this asset, it’s clear that demand remains robust for high-quality strata suites in Sydney CBD, and we anticipate this to continue throughout 2022 and into 2023,” said Mr Watson.

Optimally positioned on the fifth floor of 261 George Street, completed in early 1962, the asset is located at arguably the most pivotal location of Sydney’s CBD. The building consists of nine full office floors and ground floor retail, and benefits from three sides of natural light, predominately from the northern and eastern aspects.