Bridgehill Group continues Sydney push

February 6, 2014

Developer Bridgehill has extended its apartment activity in Sydney, buying the Kimberley Clark office building in Milsons Point from Rich List property investor Bob Ell, for around $80 million.

The sale, struck on Tuesday night, is the latest move in a significant land use shift in office precincts around the country.

With housing demand on the rise, and the interest from office occupiers weak, apartment projects are often the highest and best use for one-time office sites. New apartment towers are replacing older office buildings in the CBD locations like Collins Street in Melbourne and George Street in Sydney.

But in precincts like harbour front Milsons Point, the drivers for change are even stronger.

The existing Kimberley Clark building, at 52 Alfred Street, has around 10,000 square metres of building area.

Bridgehill has bought the property without approval but the site is likely to accommodate 175 to 200 apartments.

Leda bought the building around five years ago for $50 million.

Bridgehill already has a Milsons Point project underway.

The group bought a nearby tower from the Australand Property Group for around $50 million and converted it to $100 million worth of apartments.

The 124 apartments sold out, through CBRE Residential Projects.

The Kimberley Clark building was also sold through CBRE Residential Projects, represented by Justin Brown and Tim Rees.

The Asian backed Bridgehill Group has made an aggressive push into ­Sydney apartments.

As well as the Milsons Point project it has developments at Rhodes on ­Sydney’s Parramatta River and projects for over 1200 apartments in South Sydney at Mascot and South Sydney.

One of those South Sydney projects is on the old council depot for which Bridgehill paid over $80 million last year – a figure that made many rival developers take notice.

The Property Council, in its latest Office Market Report, noted the increase in buildings being withdrawn for redevelopment.

“Investors are already targeting more buildings for refurbishment and conversion to residential use,” said chief executive, Peter Verwer.

Australian institutions, not just Asian developers, are involved in the shift. Cbus paid $50 million for a office site in Sydney’s Elizabeth Street and plans a major apartment tower.

Originally published by Financial Review