ESR Australia has bought a business park in Sydney’s north from AMP Capital for A$71m (€46m).

The asset, at 44-50 Waterloo Road in Macquarie Park, had been held in the AMP Diversified Property Fund since its inception in 2014, delivering a 30% annualised return for the fund.

Proceeds from the sale will go towards meeting redemption requests totalling more than A$2bn and to the development of Quay Quarter Tower on Sydney’s harbourfront.

A source said the asset was sold at a “significant premium to book value” as a result of strong competition.

The disposal was consistent with the fund’s capital management strategy, the source said, adding that the fund was getting “some excellent sales results at the moment”.

Phil Pearce, CEO of ESR Australia, said: “This landbank investment offers exponential opportunity, providing holding income to allow a staged redevelopment.”

The location was well-placed to capitalise on the changing office landscape, he said, with an increase in demand for decentralised office space since the COVID-19 pandemic.

“We see business park assets as complementary to our core strategy of logistics and industrial property. We’ve strong capability in the development and management of business park space, and are pleased to add this strategic asset to our portfolio,” he said.

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