High-net-worth investors, developers and funds are expected to throw their hats into the ring for a four-storey commercial precinct in Sydney’s eastern suburbs.
Since the onset of the pandemic, commercial assets in neighbourhoods like Double Bay have become highly sought after. The latest offering is expected to fetch about $15 million when it goes to auction next month.
In a main pedestrian thoroughfare in the heart of the suburb, Piccadilly Court is comprised of a mix of retail and office tenancies and is anchored by Ray White Double Bay.
Colliers’ Miron Solomons, Matt Pontey and Guillaume Volz and Ray White Commercial Eastern Suburbs’s Grant Whiteman are handling the sale of 356-366 New South Head Road, which has long been owned by a local private family.
Colliers national director Miron Solomons said it was one of the biggest commercial buildings to hit the market in the area in many years.
“There’s been so much activity and hype in Double Bay since this time last year,” Mr Solomons said. “There is very little vacancy for offices, and rates have gone sky high.”
It’s a starkly different landscape to the CBD, with recent figures showing Sydney office towers were less than half full in January.
The shift away from skyscrapers in city centres has channelled renewed interest in semi-suburban areas, as people seek to stay closer to home for work and leisure, and to avoid travelling into the city.
“This is not the only semi-suburban precinct that’s benefited during COVID,” Mr Solomons added. “There’s been such a positive story [in which] village retailers, cafes, bars have done really well.”
Co-agent and Colliers director Matt Pontey said the eastern suburbs had been one of the most resilient and robust patches in the country, with $175 million in investment poured into Double Bay over the past two years.
“Double Bay has its mojo back and is quickly turning into the go-to suburb to work, live and play,” Mr Pontey said.
Five-storey commercial precinct Pallas House is currently under construction nearby after Pallas Group paid $32 million for a site on Bay Street in 2019. Chef Neil Perry recently signed a 10-year-lease for an as-yet-unnamed restaurant in the low-rise commercial building, telling The Australian Financial Review the suburb had a “really nice blend of commercial, retail and residential”.
Mr Pontey said: “The tide has truly turned for Double Bay with the mantra from developers being that if you build it, they will come – and they are coming.”
With no heritage component, Piccadilly Court has development potential, subject to council approval.
As it stands, there is a net lettable area of 875 square metres, generating a net passing income of $524,000.
The agents are expecting to field interest from Australian funds, owner-occupiers, local and offshore developers, and investors.
“We’re getting interest from offshore, even though these buyers can’t travel to Australia,” Mr Solomons said.
“We’ve sold assets in Double Bay to high-net-worth buyers in South Australia, mainland China, Melbourne and local buyers who want to drive past their trophy purchase every day.”
The property is scheduled to go to auction on March 18.