Ascendas-Singbridge has acquired another office building in Sydney for AUD252m (€170m), increasing the Singapore group’s total exposure to Australia to close to AUD2.4bn.

Jonathan Yap, Ascendas-Singbridge’s chief investment officer and head of real estate funds, said the firm has been “actively sourcing suitable opportunities to expand our office portfolio” since entering the Australian office market last year.

The Singapore group bought its first office, Innovation Place, at 100 Arthur Street in North Sydney from the Salteri family for more than AUD315m in March last year.

The latest asset, at 66 Goulburn Street in midtown Sydney, was bought from GDI Property Group, which paid AUD136m for the asset in 2014.

GDI’s chief executive Steve Gillard said the asset was purchased below replacement cost and GDI has since leased or negotiated to lease 100% of the building, increasing the weighted-average lease expiry to more than five years.

When asked whether the surging prices being paid for Australian assets are a concern, Yap said: “We believe in the attractiveness and fundamentals of the office sector in Sydney and maintain a positive outlook over the long term.

“In assessing investments, we consider micro aspects in addition to macro indicators. We found 66 Goulburn Street to be an attractive investment proposition against the backdrop of office supply removal in midtown precinct due to residential conversions and limited new office supply across Sydney CBD over the next few years.”

Yap said office rents in Sydney are forecast to continue to grow strongly in the medium term, with incentives to tenants set to decline.

The group, which maintains “a positive outlook” on Australia, will continually be on the lookout for investment opportunities.

Ascendas-Singbridge entered the Australian market in 2014, paying at that time a record price of AUD1.1bn for a logistics portfolio owned by GIC and Australand Property Group.

Ascendas-Singbridge has built up a pan-Asian office portfolio consisting of approximately 312,000sqm of office assets and also developing an additional 75,000sqm development across the key gateway Asia-Pacific cities of Sydney, Singapore, Seoul and Shanghai.