Could these new shops at Circular Quay be Sydney's most expensive?
A “once in a lifetime” block of prime retail space on the Sydney Harbour waterfront has been put on the market for more than $40 million, which at that price would make it one of the most expensive retail spaces in the city.
The 980-square-metre offering at Circular Quay includes five shops over four levels. It is part of the same development as the luxurious Opera Residences, which set a new Australian record for most expensive penthouse apartment sale, at $27 million, late last year. The building is under construction and is due to be finished in 2020.
The shops hit the market at a time when retail sales are weakening across the board in Australia, with the latest figures showing a 0.6 per cent decline in retail spending nationally in August, the biggest such decline in four and a half years.
However, in sign of how popular the busy Circular Quay promenade is for retailers, four of the shops have long-term, pre-commitment leases already signed with tenants, including a high-end fashion brand and fine dining restaurant.
The sale is being managed by Knight Frank Australia director of Asian Markets Andy Hu, in conjunction with JLL’s James Aroney and Belle Property’s Andrew Vines.
Four of the five shops have already been leased. They are due to built by 2020.
“This is a very unique offering, it’s a once in a lifetime opportunity, it really is,” Mr Hu told Commercial Real Estate. “This is something that is irreplaceable.”
The block is owned by China-based developers Macrolink and Landream, who bought the site for $158.8 million from AMP in 2015 in an 80/20 venture.
The shops are expected to receive interest from Chinese buyers and syndicates and high net worth individuals, along with a number of overseas investors.
“I’d anticipate strong interest from Asia, especially from Hong Kong,” Mr Hu said.
“Buyers from Hong Kong really like this type of offering. We’re selling the whole thing, so whoever buys it has ultimate control of the whole stratum.”
The retail space offers “one of Australia’s most iconic investment opportunities” and features direct frontage onto the bustling Circular Quay promenade teeming with tourists.
If sold for $40 million or more, it would be one of the most expensive, if not the most expensive, per square metre retail space in NSW, Mr Hu said.
Belle Property Commercial senior director of private clients Andrew Vines said it was one of the best he had ever seen.
“In our lifetime, we will never see a better investment opportunity – blink and you will miss it,” Mr Vines said.
In August a shop in a neighbouring building at Circular Quay, operating as a craft beer bar, sold for $21.5 million at a net yield of 4 per cent to local investors.
A similar but much smaller nearby retail strata unit at Circular Quay sold for $10.2 million earlier this year. That 131-square-metre shop sold at a net yield of 3.15 per cent.
