Waterloo commercial site sells for record rate and yield

15 November 2022

A site ripe for future redevelopment in the inner Sydney suburb of Waterloo has sold for a record rate and passing yield.

The property at 719-721 Elizabeth Street consists of a 1,127sq m site with a building currently on the site providing a net lettable are of 1,192sq m, with 28 underground car spaces.

ASX-listed Accent Group occupy the recently refurbished building, which is ideal for its creative office and merchandise/showroom usage.

The asset was purchased for $12.7 million by SHMH 3 Pty Ltd from Kavango Pty Ltd in a deal negotiated by James Masselos, Demi Carigliano and Anthony Pirrottina of Knight Frank.

The purchaser intends to redevelop the site into a mixed-use development when the tenant vacates the building in the future.

Mr Pirrottina said the property sold for a rate of almost $5,650 per square metre of developable floor area, which was a record for a development site in Alexandria and Waterloo.

He said the net passing yield of 3.38 per cent was also a record.

ā€œThe yield is reflective of what the price would have been at the peak of the market 12 to 18 months ago,ā€ said Mr Pirrottina.

ā€œThe Expressions of Interest campaign for the property resulted in 180 enquiries and six offers.

ā€œThe strong demand and record price demonstrates that well located properties with good future upside potential are still achieving very strong prices.

ā€œThe pricing gap between A Grade and B Grade assets has widened, with premium assets still achieving prices close to their peak.ā€

Mr Masselos said the property had offered a solid investment opportunity.

ā€œIt has outstanding passing income with a secure lease underpinned by an ASX-listed covenant, as well as substantial upside in the form of future redevelopment potential,ā€ he said.

ā€œThe property is nestled within the heart of the bustling and ever evolving Green Square, and is a high exposure site, benefitting from 29 metres of frontage to Elizabeth Street and excellent exposure from passing vehicular activity.ā€