Investec buys $23 million of Sydney commercial property

Investec Australia Property Fund (IAPF) has bought a three level Sydney property in Macquarie Park for $23 million that is tipped to significantly increase in value.

IAPF said the property was occupied by good quality tenants including Telstra Corporation, the New South Wales Government, and a global mining technology engineering company, Mine Site Technology.

IAFP chief executive, Graeme Katz, said the purchase would take the fund's total portfolio value to $517 million.

"The property [113 Wicks Road, Macquarie Park] is located in a prime position in one of Sydney's most established office precincts and its unique mix of office and warehouse accommodation has attracted quality tenants."

The average lease expiry was 4.2 years and annual rental growth was about 3.5 per cent, IAFP said.

"The average office rents at the property are $275 per square metre, which compared favourably to rent in other Sydney metropolitan markets including North Sydney, Parramatta, Chatswood and Rhodes," Katz said.

The offices were 600 metres from both the North Ryde and Macquarie Park train stations, which were being upgraded as part of Australia's largest public infrastructure project.

The property was adjacent to North Ryde's high density residential precinct, which would ultimately provide 2,700 apartments and house 5,000 people over the next five years, Katz said

There was a strong possibility that it would be up-zoned, and that would significantly increase the value of the property over time.

The fund manager, listed on the Johannesburg Stock Exchange, said the purchase would take their gearing level to 31.8 per cent.