One of the largest office towers at Chatswood, in Sydney's North, has been put on the market, with a value of more than $200 million, at a time when the area is undergoing a resurgence with new office leasing and residential developments.
The centre, at 821-843 Pacific Highway, comprises two 21-storey towers, and is jointly owned by DEXUS Property and GPT Wholesale Office Fund, which have a book values at about $128 million apiece.
GPT paid about $125 million for a half share in 2006 from the then listed DB RREEF Trust as part of its expansion into the suburban office sector.
Agents to the deal, CBRE's Josh Cullen and Michael Andrews, will steer the international expressions of interest campaign in tandem with Simon Fenn and Ian Hetherington of Savills.
Mr Cullen said The Zenith was regarded as one of the premier office assets on Sydney's north shore. The award winning development comprises twin towers, each of 21 levels, providing a total net lettable area of 44,389 square metres.
The sale campaign coincides with forecasts that Sydney's suburban office sector will outperform as an increasing number of existing buildings are withdrawn for residential conversion.
"Stock withdrawals on both the north shore and throughout the overall suburban Sydney market are beginning to take effect, particularly in North Sydney, St Leonards and Chatswood," Mr Cullen said.
During 2014, Chatswood outperformed all other Sydney office markets after vacancy fell from 13.5 per cent to just 8.2 per cent. That was boosted by the conversion of older office blocks into apartments.
Mr Hetherington said the opportunity to acquire a landmark suburban asset with a near 95 per cent occupancy rate is extremely rare, "particularly one that offers alternative exit options via a potential future mixed-use development".
Demand for the North Shore offices is on the rise, with Aqualand buying 168 Walker Street, North Sydney Office earlier this year for $157.5 million and Fosun International buying 73 Miller Street, North Sydney Office for $116.5 million.
Both properties have the potential for residential conversions.
