Developer pays over $18m for amalgamated Neutral Bay site21 February 2022
A local developer has snapped up a prime amalgamated site in Neutral Bay for more than $18 million as buyers continue to compete for high quality stock.
The rare offering at 165-173 Military Road named ‘Bae’ consists of four fully leased, two-storey freehold properties and offers unrivalled exposure in a prominent Lower North Shore location.
Tom Appleby and Henry Burke of Colliers sold the site in conjunction with Andrew Croll of Croll Real Estate, as the agents fielded 194 enquiries and 11 offers during the two-stage expressions of interest campaign.
With the price more than $1 million above the original guide, Mr Appleby believes the sale shows how attractive sites like this are to potential developers.
“The sale really speaks volumes about how local strip retail property owners are increasingly investigating the viability of higher and better use throughout Sydney’s North Shore as vacancy rates continue to rise and effective rents continue to fall,” he said.
“As demonstrated with both this transaction and our recent $51 million sale of 378-390 Pacific Highway in Crows Nest, a premium can generally be achieved through a collective sale if planning controls allow for uplift.”
The sale price reflects a net passing yield of approximately 2.5 per cent. The purchaser intends to build a mixed-use development in line with local planning controls in due course.
With 45m frontage, a favourable B4 Mixed Use zoning and a 16m height limit, the property has a site area of 762sqm and is located just 5km north of the Sydney CBD. It provides access to major road connections and is only a few metres away from a vast array of longstanding reputable retailers. Some of the properties had been held by the respective owners for over 50 years.
The resilient lower north shore residential market has been under-pinned by the safe nature of bricks-and-mortar and the low interest rate environment. As a result, demand for quality products in prime locations remains high.
“Neutral Bay’s affluent demographic catchment area has traditionally been typified by restricted future new apartment stock,” Mr Burke said. “This limited supply, the easing of border restrictions and the government’s push to significantly enhance the nation’s skilled migrant intake are all set to drive property values to record highs in 2022.”