Western Sydney development site sells materially above reserve

30 November 2022

A partially constructed development site in the Blacktown CBD has successfully sold materially above reserve at auction.

There were eight registered bidders competing for the 1,966sqm site which comes with DA and six stage CC approval for 184 apartments and two retails shops. A total of 45 bids were received in the hotly contested auction, with bidding commencing at $5 million. A leading residential and commercial property developer was the successful purchaser, paying $11 million.

Located at 29-31 Second Avenue, work on the property had previously commenced and includes basement car parking and the first five levels of structure.

The Colliers team of Matthew Meynell, James Cowan and Jordan McConnell, in conjunction with Lincoln Blackledge of Stonebridge, sold the property. Daniel Walley and Philip Carter of PwC were appointed receivers and managers of Nera Developments Pty Ltd, a company formerly controlled by Mark Merhi of the Merhis Corp which is the owner of the development site.

“A successful auction of this nature with multiple bidders competing is evidence that demand for mixed-use development sites is still strong despite the shifting market conditions, with the undersupply of apartment stock across Sydney fuelling this demand,” Colliers’ Mr Meynell said.

“Demonstrating the value of works on site to date, plus the benefits of dealing with an arm’s length vendor allowed us to bring major buying groups to the auction room that typically would not have pursued an opportunity in this precinct,” Stonebridges’ Mr Blackledge said.

“Due to the low levels of completions throughout 2020 and 2021 and with the affordability crisis impacting freehold dwelling prices, it’s no surprise there was fierce bidding between competing parties for this prized asset,” Colliers’ Mr McConnell added.

“This is the third Colliers marketed transaction involving commenced residential / mixed use development sites. Whilst a concerning trend, there are promising results that demonstrate with careful strategy and the right agents, a premium result can be achieved for all stakeholders” said Colliers’ Mr Cowan.

Located just a four-minute walk from Blacktown Station and seven minutes from Westpoint Shopping Mall, the property has an approved GFA of 14,144sqm.

“Blacktown is the largest LGA in NSW and its CBD is fast becoming one of the most prominent local centres in Greater Western Sydney. The region is forecast to undertake strong economic and population growth that is underpinned by record levels of infrastructure investment in education, employment and healthcare,” Mr McConnell said.