Australian law firms are expecting more work from commercial property deals this year, as two recent sales in Sydney through Allens Arthur Robinson hint at higher activity levels in the sector.
The firm acted for property development and investment firm Grosvenor Australia in the sale of 20 Hunter Street, Sydney, to Hong Kong’s CLSA Capital Partners for A$77 million in December, and an office tower on 25 Smith Street, Sydney, to a private investor for A$48.4 million. The latter will be completed later in 2010.
Allens Arthur Robinson Sales the Most Significant in Six Months
Allens Arthur Robinson partner Victoria Holthouse said the sales were two of three significant deals struck in the past six months. She was seeing increased activity from both owners and investors, with greater interest from offshore investors, especially from Singapore, and valuations beginning to pick up from the lows seen in 2009. “We’re hoping for continuing activity in our area…we see good signs in that,” she said.
Australia Commercial Property Sector Looking Positive
Minter Ellison partner and real estate specialist Virginia Briggs told Suite101 it had been “a pretty slow year” for all commercial property types but there was a sense now that the sector was improving. The firm had acted in some mergers and acquisitions, but portfolio distressed asset sales had created the most work for the commercial property division in 2009.
Ms Briggs said the sector was picking up countrywide, but she didn’t think New South Wales would come out of its “flatline” until after the state election in March 2011. There was a limited period of time however, that property owners could “sit on their hands” and Minter Ellison had one institutional client in particular with a large number of properties to sell.
Institutional Investors, Developers to Capitalise on Values, Conditions
Freehills partner David Sinn was expecting more activity for his firm from the commercial property sector over the next 12 months, as institutional investors and developers looked to profit from better market conditions and stable property values.
“The past 12 months have been difficult for the commercial property sector (and therefore commercial property lawyers) given the tightening of the debt markets and the instability in the commercial property market,” he told Suite101 in an email.
Mr Sinn said the major deals Freehills’ commercial property division had been working on recently were Lend Lease’s bid for the Bangaroo redevelopment in Sydney and acquisition of the GTV9 site in Melbourne, and advising Macquarie Bank on the sale of most of its real estate management rights to Charter Hill.
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