AMP Capital has acquired an industrial building in an inner Sydney suburb from Goodman Group in a two-part transaction that will cost up to AUD145m (€99m).

The asset has been added to its AUD1.4bn wholesale Australian Property Fund.

The fund, which is currently open to new investors, also has rights to acquire a second building currently under construction in a complex known as Connect Corporate Centre.

AMP said the first building, which has 5,640sqm of lettable space, is fully leased to tenants including Boston Scientific and JLL, with a weighted average lease expiry term of eight years.

AMP Capital today declined to comment further on the transaction, but media reports put the purchase price of the first building at AUD43.6 million.

The complex is located in the southern Sydney suburb of Mascot, adjacent to rail services and close to Sydney’s domestic and international airports. 

In a statement, AMP said the South Sydney market had been transforming for the past decade, with rental growth strong due to investment in infrastructure, competition from residential property developers for land, and an upgrade in the quality of the stock being offered.

In its most recent performance report, AMP described the fund as lowly-geared and in a strong position to compete for acquisitions. As of 31 March a AUD250m debt facility remained undrawn.

The open-ended fund owns a portfolio of 20 assets, and has returned an average of 9.1% a year since its inception in 1985.