Boutique property group EG Funds Management has flagged plans to buy up to $400 million of commercial property this year after striking a deal on an office building near Sydney’s Martin Place.
The property, at 92 Pitt Street, was bought for $30.65m on an initial yield of 7.3 per cent. JLL’s James Aroney negotiated the sale on behalf of the vendor, LaSalle Investment Management.
EG Group chief executive Adam Geha said t the group plans to refurbish the building over the next five years.
He said the upgrade would occur as tenants moved out.
“We would like to ultimately align the building and its brand with the revitalisation of Martin Place which we believe is a process that is already underway,” Mr Geha said.
“It is currently a B-grade building and we would like it to be classified as an A-grade one.
“We would ideally like (new) single floor tenants and would like to target small to medium enterprises based in the CBD, from IT firms, to recruitment firms to accounting firms,”
EG will manage the building on behalf of a syndicate of private investors.
On EG’s broader plans, Mr Geha said that the group aims to buy between $100m to $200m worth of properties for its Core Plus Fund. It also aims to purchase $200m of properties for other investment mandates.
The EG Core Plus Fund holds about $200m worth of property.
Mr Geha said that the group was in due diligence to buy an industrial property for about $15m.
This article first appeared in The Australian Business Review.