German fund manager makes play for Walsh Bay office block

The sale of the office block is a break thorough for the Sydney market as more deals get done in this half.

Real I.S. has purchased 8 Windmill St, Sydney

German fund manager Real I.S. has bought an office building in Sydney’s Walsh Bay from local property house Marks Henderson in a near $50m deal.

The group has exchanged contracts to acquire 8 Windmill St as it capitalises on the creative district’s proximity to the CBD and Barangaroo.

The A-grade commercial building, designed by Peddle Thorp Walker, was completed in 2003, and also sports an on site cafe and is near the area’s nearby eateries.

Marks Henderson bought the building in 2014 for $28m, but it is one of a collection of seven properties it sought to sell in 2022.

At that time, the manager tapped investment bank Morgan Stanley and real estate firm Knight Frank to offer that group of fringe offices for about $500m.

But the process was hit by both rising interest rates and fears about occupancy levels in some markets. But Marks Henderson is a canny manager and trader, and the building is well-positioned.

The modern seven-level office building overlooks Sydney Harbour, with direct views to the Harbour Bridge. It is leased to a range of tenants including BG&E, Costin Roe Consulting and Pittwater Industrial.

The office comprises 3819sq m with basement parking for 32 cars. The foyer and ground level cafe have been upgraded and refurbished, providing a modern, contemporary entry to the building.

Jonathan Vaughan of Knight Frank brokered the latest deal.

The German group has been active. In late 2020, it bought the buildings which now houses Canva in Surry Hills as part of a $97m deal. It picked up two adjoining office buildings on the corner of Kippax St and Waterloo St from private developer Cornerstone Property.

But Canva has since bought a nearby site, where it is planning a new complex.

Real I.S.’s local operations are run by Desiree Bühler, who became managing director in Sydney this year The real estate investment manager has an overall portfolio with assets worth about $1bn and an aggregate area of more than 115,000sq m.

It has offices along the east coast, with towers in Sydney, Melbourne, Canberra and Adelaide.

Originally published as German fund manager makes play for Walsh Bay office block