The commercial sales drought in the Sydney CBD is showing no signs of abating following the withdrawal from the market of city buildings worth more than $400 million.
During September, three major properties (1 Castlereagh St, 20 Hunter St and 140 Sussex St) were taken off the market as institutional owners sought to recapitalise their balance sheets.
CB Richard Ellis Regional Director, Institutional Investment Properties, Rob Sewell said little was now available for sale in the Sydney CBD, other than the landmark Aurora Place tower, which was being offered for sale on behalf of the Commonwealth Property Investment Trust.
“There is a growing realisation among buyers that they may have missed the boat in regard to picking the bottom of the Sydney investment market,” Mr Sewell said.
“With the Sydney office leasing market in a recovery phase, owners are taking the opportunity to withdraw buildings from the market. The thinking is they can strengthen the tenancy profile of their properties and potentially re-list them for sale in a stronger investment market.”
The Sydney CBD is typically the most heavily traded investment market in the country, with an average of $1.7 billion in office stock changing hands each year.
However, CBRE’s analysis shows that just $575 million in CBD stock was traded last year. The drought has continued into 2009, with just $71 million in office property changing hands to the end of August.