Hamburg-based property giant Union Investment Real Estate is expanding its portfolio of strategic investments in Australia

St Hilliers Property has sold one of the Sydney CBD’s latest grade-A office buildings to a German real estate investment group for a consideration of roughly $140 million.

The property is a redeveloped 1930’s heritage building located at 155 Clarence Street, that has long been esteemed one of the finest examples of art deco architecture in downtown finished

St Hilliers finished its overhaul of the building in March, after first acquiring it for one of its unlisted funds back in 2011 for $31 million.

The property was first built at the end of the 1930’s as a warehouse and exhibition space for wholesale company S Hoffnung and Company, and has since served as the headquarters for the NSW branch of the Australian Red Cross.

According to Tim Casey, St Hilliers’ executive chairman, the overhaul has achieved a full restoration of the building, while providing nearly 12,000 square metres of a-grade office space and a further 500 square metres in retail sites, for a fully leased net income of $8.5 million.

The redevelopment also sought to confer the historic building with the kind of sustainability and environmental credentials that are so appealing to heavyweight property investors from abroad, including a 5 Star Green Star Design and As Built rating and a 4.5 star NABERS energy rating.

Hamburg-based property giant Union Investment Real Estate is believed to have sought the assistance of Eureka Funds Management in securing the deal, as part of an ongoing strategic expansion into the Australian market.

The deal is the second major acquisition by Union Investment in Australia following its initial foray into the local property market last year, with the purchase of the Southpoint commercial precinct in Brisbane for $200 million.

At the time of the Southpoint acquisition Martin Bruhl, Union’s head of investment management, international, said that the strategic investment “provides an excellent starting point from which to build a medium-sized portfolio.”