St Hilliers Property Pty Limited has acquired a commercial development site at 127 Argyle Street, Parramatta for approximately $22 million.

The 2,579 square metre property was purchased from the Transport Infrastructure Development Corporation and will be developed into an 18,500 square metre A-grade office building. The property is ideally located opposite Parramatta Railway Station adjacent to the recent extension to the Westfield Shoppingtown and Greater Union cinema complex.  

The sale also included an existing hotel licence, gaming permits and entitlements and poker machines of a former hotel, which had been situated on the property.

St Hilliers Chief Executive Officer, Tim Casey, said the land component would be a seed asset for St Hilliers Funds Management Limited's fourth property fund currently being marketed to wholesale investors. 

"The fourth fund is a development to core fund and marks the next phase in the expansion of our funds management platform," Mr Casey said.

"We believe this new unlisted property investment vehicle will be attractive to investors seeking a blend of development and core property returns over a longer period of time. Fund investors will be able to take advantage of a lower entry price as well as achieving enhanced returns," he said.

St Hilliers General Manager Fund Management, Nicholas Ridgwell, said that St Hilliers is close to finalising its $200 million capital raising for the fund.

"This fund will also be investing in a commercial development property at 88 Talavera Road, North Ryde, which has an estimated end value of $150 million, and a $30 million industrial warehouse facility at 34-38 Anzac Avenue, Smeaton Grange," he said.

St Hilliers proposes developing a 13 level commercial building designed to achieve a 4.5 ABGR and 4 Green Star rating on the Argyle Street site, which will meet a growing demand for commercial property with ecologically sustainable development (ESD) features. 

"Since the late 1970s a large number of government, institutional and corporate entities have established offices in Parramatta and have been able to capitalise on a well skilled local workforce," Mr Ridgwell said.

"Increasingly, many of these organisations are seeking new premises that meet ESD criteria ensuring the commercial market in Parramatta will continue to be very strong over the long to medium term," he said. 

St Hilliers recently announced the first in its series of closed-end funds, St Hilliers Enhanced Property Fund No.1, would deliver a pre-tax return of approximately 20% per annum on investors' funds after fund fees and expenses other than performance fees. The return substantially exceeds the Fund's original target of 15% per annum after performance fees and expenses. Fund No.1 was launched in mid 2004 and managed five property investments in Sydney, Melbourne and Canberra valued in excess of $65 million.