The Sun Property Group have sold an asset at 39 Albany Street Crows Nest for a near 50% gain after a 4 year holding period.
The fully leased property was offered to the market late last year and comprises one of the largest land holdings near to the proposed Crows Nest Metro Station. The three-storey, north facing building, overlooks a neighbouring residential area and offers over 3,286sqm of office space with 42 car spaces generating $1,174,844 in net income.
The 1,608sqm property is zoned Mixed Use under the current 2013 North Sydney LEP which provides for a height limit of 13m (circa 4 storeys), however it is unlikely that any redevelopment of the site will take place under the current LEP.
The property was acquired by private investor, JH Melrose, for $32.35m, representing a 3.6% yield, and settled in May 2021.
The recent history of the sale of this asset reflects the influence that the Sydney Metro and potential planning changes has brought to properties in the area.
The Metro was first announced in 2015 and whilst the final location of the Metro station had not been announced, the influence of the improved infrastructure on the market began. Seeing the opportunity for growth ahead of time, Pindan picked up the asset in 2016 for just $13.3m and offloaded it to Sun Property 12 months later for $22m. These sales reflect a compound annual growth rate of 8%pa since 2017 or 19%pa since 2016.
Sun Property are residential property development group with boutique apartment projects predominantly across northern Sydney.
Like many developers at the time, there was a speculation that Crows Nest & St Leonards would see significant changes to the planning controls. NSW Planning commenced a review of controls in 2018 and finalised the planning package for St Leonards and Crows Nest in 2019. The new plans effectively provided for increased development along the Pacific Highway adjacent to the Metro Stations, leaving the balance of the Crows Nest and St Leonards with limited opportunities.
The limited upside to 39 Albany Street was likely to be a factor in Sun Property selling the asset.
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