Former Universal Film warehouse in Sydney CBD could sell for more than $55 million

Built in 1936 by architect William Ritchie, the building, which has decorative panels with film motifs, was originally intended for use as film storage vaults and a projection theatre, according to NSW government’s heritage listing.

RCA House on Kent Street is underdeveloped for its land size, agents say. Photo: Google Maps

The record also notes that the structure has “outstanding potential” to remain intact.

Knight Frank’s Andy Hu, who is selling the building with John Bowie Wilson and Jonathan Vaughan, said the property was likely to be redeveloped into a hotel with about 280 rooms and four serviced apartments.

“What we’re targeting is the 3.5-star (hotel market) with maybe a few serviced apartments on the top, as it’s close to all the amenities right across Town Hall Station,” he said, adding that the maximum height of the site is 80 metres or 25 levels.

Redevelopment into a commercial office building was another option and Mr Hu said that subdividing the space and reselling as strata office suites would be lucrative.

“In the southern CBD, the strata market is going crazy. (Similar) buildings a few years ago were selling $6000 a square metre, these days they’re selling easily $13,000 to $15,000 a square metre,” he said.

“Of course because of the metro and CBD building withdrawal and residential conversions, but there is still a lot of demand for smaller space.”

The building at 499 Kent Street could rise up to 80 metres. Photo: Mark Merton Photography

Owners Saatvic Holdings Pty Ltd, an Australian private investment company, paid $6.765 million for the property in 2004, Domain Group records show.

That would represent a 713 per cent value increase if the property sells for its asking price.

Mr Hu added that investors may want to land bank it for a few years before redevelopment while waiting for the rent to be ramped up, thanks to the lack of approved college spaces in the city.

The site, which is on 811 square metres, can yield a gross building area of 11,000 square metres.

“In the CBD, it’s very, very hard to find a site over 800 square metres. In general, you see a lot of buildings that have about 400 to 500 square metres land size, that’s quite common in the CBD,” Mr Hu said, adding that the building was underdeveloped for a site of that scale.

The three-storey property generates an annual rental income of about $1.5 million and is approved for college use on the upper two levels, while two retail tenants are on the ground floor.

Mr Vaughan said the location of the building made it an attractive listing.

“499 Kent Street is a significant CBD landholding, and is located directly opposite Town Hall on a corner site within the growth corridor of Sydney’s CBD.”

Further south in the CBD in the World Square precinct, Credit Suisse is offloading their 50 per cent stake in the commercial tower at 52 Goulburn Street.

Meanwhile, the Property Council of Australia’s recent Office Market Report shows that the Sydney CBD office market has the lowest vacancy rate in nearly 10 years, dropping from 5.8 to 4.6 per cent in the past six months.