Funds managed by DWS Group have acquired a boutique office building in central Sydney, with the transaction valuing 32-36 York Street at A$153 million (US$105 million), marking one of the first major institutional office deals in Australia's largest city this year.
A Landmark Deal in Sydney's CBD
The German asset manager purchased a 49 percent stake in the property via its Grundbesitz Global real estate fund for approximately €46.1 million, implying a total asset value of €94.1 million. The remaining 51 percent interest was acquired by a separately managed account backed by a German institutional investor, according to market sources.
Located in the heart of Sydney's central business district, 32-36 York Street comprises an 11-storey boutique office building that integrates a meticulously restored 1886 heritage warehouse with a newly completed modern extension. The property provides approximately 8,200 square metres (88,264 square feet) of total lettable area, translating to a price of A$18,659 (US$12,798) per square metre.
The seller, local developer Milligan Group, had been looking to offload the property as part of a broader capital recycling strategy following the completion of the building's redevelopment.
DWS Returns to Asia Pacific Acquisitions
"We have witnessed demand increasingly focus on high-quality, centrally located office buildings with excellent sustainability attributes," said Ben Taylor, head of Australia real estate at DWS. "This transaction demonstrates our local team's ability to execute high conviction, research-led investment strategies."
The deal, which is understood to have closed in late February, marks the first property investment in Asia Pacific announced by DWS since Taylor joined the firm last month from The Living Company, where he managed a $3.8 billion open-ended student housing vehicle.
It also represents the first new investment by the Grundbesitz Global fund since 2022, as the manager sees improved entry pricing following the interest-rate-driven repricing that swept through global real estate markets over the past several years.
Sydney Office Market Fundamentals Strengthening
The asset features large windows, high ceilings and flexible floorplates, with ground-floor retail and restaurant space. Its location within walking distance of both Wynyard and Town Hall railway stations positions it well to attract tenants seeking modern, transit-oriented office space.
Prime rents in the Sydney CBD rose 6.5 percent year-on-year to an average of A$1,540 per square metre in the fourth quarter of 2025, according to data from JLL. Vacancy stood at 14.7 percent but is expected to tighten as limited new supply enters the market over the next two years.
"32 York Street offered a strategic opportunity to acquire a newly completed 'next-gen' boutique Sydney office asset, providing our investors exposure to strengthening Sydney office market fundamentals," Taylor added.
What This Means for Australia's Office Sector
The acquisition underscores a growing trend among global institutional investors returning to the Australian office market after a period of caution driven by rising interest rates and post-pandemic uncertainty over office demand. With repricing now largely complete in many Australian markets, international capital is once again targeting high-quality, well-located assets.
Industry analysts expect further activity in Sydney and Melbourne throughout 2026, particularly as more offshore investors seek to deploy capital into assets offering stable income returns and long-term capital appreciation in one of Asia Pacific's most transparent and liquid real estate markets.
