Four grand terraces in King Cross that are home to World Bar back on the market again
A line of four terraces in Kings Cross, incorporating the famous World Bar and Candys Apartment night club, is up for sale with price expectations of more than $20 million.
If the expressions of interest campaign for 20-26 Bayswater Road, Potts Point, ends successfully it will be a quick win for Eagle Property Group, which purchased the terraces in early 2016 for $12 million and then extensively refurbished them.
But interested parties will need to have a suitable vision, and funds, for the terraces – Eagle is in no rush to sell.
Instead, having “restored dignity” to the buildings, they decided to list the properties to “test the market” following multiple off-market offers of around the $18 million mark, which ”surprised” them.
The property encompasses the famous World Bar. Photo: Supplied
Eagle director Lawrence Kopping said gentrification was changing the face of Potts Point, and this was largely because of the introduction of the state government’s lockout laws that had led to the closure of night clubs and bars.
“There’s such transformation happening in the area,” Mr Kopping said.
“We were approached a few months back with an approach to buy the properties and we were quite surprised by the increase in the value by the works we’d done.
”They’re such special properties that we thought it would be a good time to put them to market.”
Listing agent Daniel O’Brien, of LJ Hooker Commercial South Sydney, who is selling it in conjunction with Richard Garland of Knight Frank, said the recent inclusion of ‘demolition’ clauses in the majority of the leases meant the heritage buildings could now be converted for other uses, such as residences.
Demolition clauses allow for the landlord to take possession of the property with six months notice, given planned work to the property is substantial enough to warrant vacant possession.
“You could convert it back into two homes [while World Bar still has a lease over the other two]. It’s got four titles, each building used to be separate,” said Mr O’Brien of the 2280-square-metre property.
A residential scheme designed by Antoniades Architects has been developed for the four terraces – each terrace featuring an average internal area of more than 500 square metres spread across four storeys.
Antoniades Architects has composed a residential scheme for the properties. Photo: Supplied
Demand for such homes in Potts Point is high.
But there’s a sticking point – World Bar doesn’t have a demolition clause in its lease, and it has two 10-year options to exercise following the conclusion of its current lease in two years’ time.
The popular venue occupies two terraces, across three levels. The remaining six leases – which include the nightclub Candys Apartment, a hairdressing salon and gym – take up the lower levels of the two other terraces.
Times have been tough for pubs and clubs in Sydney’s Kings Cross area, which includes the suburb of Potts Point. Hugos Lounge, located across the road from the four terraces, closed in 2015, with owner Dave Evans citing loss of revenue from the lockout laws as the cause.
But Mr O’Brien said that he would not be surprised if World Bar chose to exercise at least the first of its 10-year options in two years’ time.
“If it survived the last few years” then the business could be in for the long haul, he said.
No one from the World Bar could be reached for comment.
Mr Kopping said that Eagle Property Group was at the point of deciding what to do with the properties.
“I suppose there’s now a turning point,” he said. “We’re on the cusp of deciding whether to pursue the retail angle, or to position them as residential.
”Really we’re not residential developers, if there was a residential developer out there that had a really special idea for these properties we’d sell to them; alternatively we’ll keep them.”
“We’re a very, very conservatively geared fund so there’s absolutely no kind of pressure whatsoever,” Mr Kopping said.
The property would be suitable for both uses, he said, with a shift in the areas demographic creating demand for well-considered retail offerings.
Mr O’Brien, whose agency also manages the leases, said there was potential for the new owner to improve on the income generated by the terraces, particularly ”when World Bar exercise their option”.
Net passing income on the entire site is $958,090 per annum.
“There is also scope for it to be turned into a hotel, you’ll get about a 60-room boutique hotel,” Mr O’Brien said, adding that he had already received several inquiries from hotel operators.
- 20-26 Bayswater Road is for sale by expressions of interest closing June 14 at 4pm.
