Prime strip retail assets attracting strong demand as 3 assets in Sydney’s eastern suburbs sell over the past 4 months

Prime strip retail assets in Sydney are attracting strong buyer interest in the current market, evidenced by strong sale results for three properties in the city’s eastern suburbs over the past four months by Knight Frank.

The properties, which sold for a collective $9.2 million in three deals, all attracted significant enquiries and offers from buyers.

The most recent property that was sold was 133 Belmore Road in Randwick, a two-storey freehold with 180sqm of net lettable area on a 140sqm site with one car space, which changed hands for $2.35 million in a deal negotiated by James Masselos and Anthony Pirrottina.

It was sold by a local owner-occupier, the Choy Family, to an offshore investor at a rate equating to $13,055 per square metre on the net lettable area and $16,785 per square metre on the site area.

The property was sold via a short lease back agreement, but had previously been occupied by the iconic Choy’s restaurant for 45 years, with retail on the ground floor and a function space above.

Meanwhile, a two-storey retail building at 227 Glenmore Road in Sydney’s Paddington sold earlier this year via an off-market deal negotiated by Knight Frank’s James Masselos, Demi Carigliano and Anthony Pirrottina for $3.75 million.

The property, which is fully tenanted by Sonder Café, was purchased by a local investor from the Ockenden Family, which had owned the property for around eight years.

It has a total area of 153 sqm, including 118sq m of internal area, on a 142sq m site and is located in the heart of Paddington’s iconic Five Ways.

Another recent deal negotiated by James Masselos, Anthony Pirrottina and Demi Carigliano of Knight Frank saw a local family sell a 257sqm two-storey retail asset on a 123sqm site in a strip retail precinct at 218 Coogee Bay Road to local investor Pepe Capital Management for $3.1 million.

The vacant and recently refurbished property in the heart of Coogee’s iconic shopping village included two car parking spaces, rear lane access and basement storage.

Mr Masselos said it was clear there was strong demand for premier strip retail freehold properties in the current market, with each campaign generating significant buyer interest.

He said retail strip properties in premium locations with excellent surrounding amenity, and in the case of these recent sales, in Sydney’s eastern suburbs, were continuing to perform well.

“Traditionally, many of these assets are very tightly held, and won’t change hands for decades,” he said.

“When they do come up for sale, or there is an opportunity to purchase, buyers consider the rarity of the opportunity as well as the quality of the investment.

“Since COVID, with more people working from home and relying on their local amenity throughout the week, the demand for high-quality retail and entertainment optionality in core retail hot spots is more important than ever, which has underpinned the value of these properties.

Mr Masselos added that strip retail assets more often than not have a residential component above, which provided the added benefit of a defensive, mixed-use income stream for purchasers.

Mr Pirrottina said all three retail strip properties recently sold had been in desirable eastern suburb locations, in the heart of prime retail hubs and close to plenty of amenity.

“Randwick, Paddington and Coogee are very popular suburbs with excellent retail, entertainment and transport amenity, while being conveniently located to the CBD, and in the case of Coogee, close to the beach,” he said.

“These properties are also located in iconic thoroughfares, with plenty of exposure to lots of foot and vehicular traffic.

“In addition, they all have possible redevelopment potential due to the zoning, which adds value to the investment and was an extra drawcard for buyers.”