Property News

GE adds $235.5m to office buy-ups

03 October 2006

GE Real Estate, the US commercial property giant, has bought three Sydney office towers for a total of $235.5 million, capping off a $1.4 billion spending-spree in Australia and New Zealand in the past year.

The group said yesterday it would maintain that level of growth for at least the next two years as it remained bullish on office markets in Australia's major capital cities.

GE Real Estate bought office towers at 60 Carrington Street and 130 Elizabeth Street in Sydney's CBD and 90 Arthur Street in North Sydney from the Kyko Group, controlled by Mary Wong Jenkings and Terry Jenkings.

"This (was) a unique opportunity to purchase a well-maintained, A-grade office portfolio in the strengthening Sydney market," GE Real Estate director of Australian investments Jason Kougellis said.

"This portfolio offers a good mix of value-add and stabilised assets that are well-positioned to take advantage of the rental growth anticipated as vacancy continues (to recover)."

The purchases round up a busy week for GE, which last Thursday announced it had bought three Canberra office buildings for about $40 million and an office tower at 121 Wharf Street in Brisbane's CBD for just over $20 million. Also last week GE announced it had bought a North Sydney office tower for $20 million.

GE Real Estate has also been rapidly expanding in other countries in recent months, particularly Japan and the US.

Last week, the group announced that it had bought 147 primarily industrial US properties for $2.2 billion from the Texas-based Crow Holdings.

In Australia, GE Real Estate southeast Asia managing director Roger Keane said the group had sold some assets in recent months which tempered its net growth.

The group received about $60 million from the sale of three office buildings in Brisbane, Sydney and Canberra in June.

Mr Keane said the group would consider moving into developing apartments in Australia, as it did in other countries including India.

Any such move would likely be in conjunction with a local developer, however no moves had yet been made to enter the sector, Mr Keane said.

The vendor of the three Sydney office buildings, Kyko Group, last year paid $108 million for the long-term leasehold over the DFS building at 155 George Street in Sydney's Rocks area, which was sold by Challenger.

The company also owns office property Citadel Towers at Chatswood in Sydney's north and last year strata-titled its 66 Hunter Street CBD building.

GE Real Estate made its first equity investment in Australian property in 2001, paying $100 million for a portfolio of retail and commercial property.