Case Studies - Sumner Capital

PIER 8/9, WALSH BAY, SYDNEY

Project Description

10,254 sqm heritage listed former shipping wharf
Adaptive reuse for office space completed in 2000
Iconic presence

Attraction

Purchased in 2014 for $46.35m at 8.6% yield
Long leased asset with strong lease covenant on an attractive yield
Rapidly improving area due to neighbouring Barangaroo site & new train station

Strategy

Forecast increased occupational demand for creative space by institutional tenants
Capture rental growth
Undertake capital expenditure program

Outcome

Significant cap rate compression achieved since purchase
Rental growth higher and incentives lower than market
IRR >25%

50 MILLER STREET, NORTH SYDNEY

Project Description

B grade office asset in North Sydney
Let to National Australia Bank for 3.5 years from acquisition
10,357sqm of Net Lettable Area

Attraction

10% purchase yield
Good location – transport & local amenity
Low rent
Large, efficient floor plates
5 star NABERS energy rating

Strategy

Core+ risk
Enjoy initial double-digit income distribution
Then undertake repositioning – lifts, entrance, air conditioning in readiness for lease expiry
Re-lease and sell

Outcome

Majority of building let to AAA-rated credit tenant for 12 years
Rent exceeding underwriting
IRR >30%

117 HARRINGTON STREET, SYDNEY

Project Description

Well located, fully refurbished 5 storey heritage-listed office building, with exposed timber beams and elegant features

Attraction

Core location
Two very strong credit rated tenants

Strategy

Acquired in a low point of the capital cycle
Leasing risk taken by renewing or releasing the building
Benefitted from strong rental growth

Outcome

Strong rental growth
Cap rate compression