A number of key office buildings, with a combined value of more than $400 million, are set to change hands in coming months, although it's unlikely all will be converted to residential, according to analysts.
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They include 310-320 Pitt Street, being sold by United States property giant Equity Commonwealth, headed by billionaire businessman Sam Zell through JLL and valued at more than $192 million. It is leased by Telstra with three 10-year leases that began in June 2010.
Another is 75 Castlereagh Street, where the owners, Eastern Holdings, has appointed James Aroney and Ben Hunter of JLL for the property, which was bought in 1994 for $16 million. No price was disclosed but similar buildings have been valued at more than $50 million.
The property at 4 Bligh Street is being sold by Cromwell Property and marketed through Colliers International's Vince Kernahan and CBRE's Scott Gray-Spencer. No price was disclosed, but similar assets are said to be worth about $70 million.
Abacus Fund, which is raising $121 million through the sharemarket, and German group, AM alpha, have put 309 George Street on the market through JLL and Knight Frank with expectations in excess of $100 million. That process closed this week.
Earlier this month, LaSalle Investment Management, sold its 25 per cent stake in $1 billion ANZ Tower at 161 Castlereagh Street to the global group, Blackstone.
According to Simon Storry, head of international investments, at JLL Australia, there is expected to be increased activity by Chinese investors and in particular from Chinese sovereign wealth funds targeting real estate in offshore markets.
He said Chinese investors have become more active cross-border real estate investors, with estimates they acquired $US6.7 billion of office product outside of China in 2014 compared to $US2.1 billion in 2012.
"Strong demand for core assets by sovereign wealth funds (SWFs) will continue this year and already a number of them have publicly announced higher allocations to real estate, however a correction in the crude oil price is a risk to SWFs investment intentions," Mr Storry said.
"Private equity firms have historically been on the value-add to opportunistic end of the real estate investment spectrum. but increasingly a number of firms will participate in the market for core assets."
JLL's head of office investments, Australia, Rob Sewell said while 2014 was the year for large single asset acquisitions in Sydney and Melbourne, the correction in the Australian dollar against major currencies has made Australian real estate appear more attractive.
"However, the volatility of the Australian dollar has increased currency hedging costs and will make those investors looking to hedge currency risk less competitive," Mr Sewell said.
"Investors have taken note of the improved leasing market fundamentals in Sydney and Melbourne. Stronger leasing activity and the prospect of rental growth and lower incentives provides an additional ingredient to the investment proposition for core plus assets in 2015."
