Sydney unit blocks being snapped up by buyers amid strong demand for the property type

3 June 2024

Unit blocks are being taken to the market as vendors look to capitalise on strong market demand, with two recent sales totalling nearly $12 million demonstrating this trend.

An apartment block and two townhomes on a 699.3sq m block at 313 Bronte Road in Waverley have sold in one line for $9.25 million in a deal negotiated by Knight Frank agents Demi Carigliano and James Masselos in conjunction with Clint Ballard of Sotheby’s International.

The Waverley property was sold by vendor Danny Caretti, who first moved into one of the units on the site as a student in 1980, and then over time purchased each unit in the block of four one by one from his landlady – who had also become his friend – Ena Harper.

Mr. Carigliano said the property was met with strong demand during the Expressions of Interest campaign, with 140 enquiries and six offers.

“The property offered a compelling investment, with an estimated total income of more than $340,000 per year as holding income and future development potential, with approval in place for a storage room at the rear of the site,” he said.

“It’s not often a property like this comes to the market in a sought-after location such as Waverley or the Eastern suburbs, and this one hadn’t been officially offered to the market since 1958.”

Following the Waverley sale, a block of four apartments on 694sq m at 40 Victoria Street in Penshurst was been purchased for $2.55 million by a private investor from the Coenig family in a deal negotiated by Knight Frank’s Adam Droubi.

Mr. Droubi said the property sold prior to a scheduled auction for a record low 3.5% gross yield, with 64 enquiries and 3 groups competing to exchange contracts on the property on the final day.

“Again, the property has excellent holding income, with a potential total rental of $98,800 per year, with future upside due to the zoning,’ he said.

“It has four large townhouse style apartments, each with its own lock-up garage, and the block is conveniently located within proximity of Penshurst and Mortdale train station.”

Knight Frank Joint Head of South Sydney Anthony Pirrottina said the strong buyer competition witnessed during the campaigns for the two residential unit blocks demonstrated the current high demand for this property type.

“Buyers want unit blocks largely for the income, made more attractive by ongoing rental growth in Australia, and the replacement value of these properties also continues to rise due to inflation,” he said.

“Many vendors are taking their unit blocks to the market to capitalise on the current strong demand.

“We have another four unit blocks on the market or about to come to the market with a collective value of around $30 million, and we expect to achieve strong sales results for these, given the recent trend.”

The four listings of unit blocks include:

• A four-level block of 16 apartments on a 1,277sq m site at 5-7 Windsor Road in Merrylands is for sale in one line, with price expectations of $7 million and a potential rental income of more than $484,000. It is being taken to the market via an Expressions of Interest (EOI) campaign run by Knight Frank agents Adam Droubi and Jessen O’Sullivan in conjunction with Ray Fayad of Laing & Simmons in Parramatta.

• A block of 10 apartments at 1 Sparkes Lane in Camperdown is being taken to the market via an EOI campaign run by Demi Carigliano, Anthony Pirrottina and Adam Droubi or Knight Frank. Price expectations are in the early $7 million for the fully leased block of apartments that present ‘as new’ and have a potential rental income of more than $390,000.

• An art deco block of 4 apartments on 88 Francis Street in Bondi Beach, known as ‘The Pines’ is up for sale via an EOI campaign run by James Masselos, Adam Droubi and Demi Carigliano of Knight Frank. Price expectations are $6.5 million for the block, which has a total market gross income of more than $270,000 and DA approval for alterations and additions to transform the block.

• A block of 6 apartments at 3 Moore Street in Bondi is up for sale via an EOI campaign run by James Masselos, Adam Droubi and Demi Carigliano of Knight Frank. Price expectations are $7 million, with the block having a total market rent of more than $353,000.