George Street development sites to reap owners $170m-plus
Two major development sites along Sydney’s revamped George Street are on the market worth a combined value of about $170 million and come with approvals for hotel and residential projects.
The sites hit the market at a time when the country is in the grip of a hotel room shortage and if developed by new owners, an additional 200 rooms-plus will be added to Sydney’s market.
Developers bought the sites about five years ago on the cusp of an anticipated residential boom but, with the slowness of the planning application process, the owners have benefited from keeping them intact and riding the office boom.
But with demand increasing for higher yielding property in the low interest rate environment, the vendors are expecting strong buyer interest.
Sitting on the corner of Goulburn Street, the site at 700 George has the potential to fetch about $130 million for the private vendors.
The 1225-square-metre prime site includes two retail frontages near World Square and Chinatown and has a DA for a 40-storey mixed use residential and hotel tower that will also benefit nearby Darling Harbour, which is also undergoing a $2 billion upgrade in coming years, according to agents, Knight Frank’s John Bowie Wilson and Dominic Ong. The sale is in conjunction with Massari’s, Simon Elcham.
The agents said all the existing buildings on the site are tenanted, providing income as development plans are finalised. All leases have demolition clauses allowing vacant possession of the site within 12 months’ notice.
“There are currently a number of development options on the table which include a hotel, an office tower, residential apartments or a mix of all three. All of which are permissible under the current planning controls and have enormous potential to generate excellent development revenue returns,” Knight Frank’s partner, head of commercial sales, NSW, Mr Bowie Wilson said.
Knight Frank’s Dominic Ong, partner, Asian Markets, NSW said the property will benefit from Sydney’s public transport upgrades with a light rail tram stop adjoining the site on George Street while transport access can be obtained via Goulburn Street.
One block away, the 455-square-metre site at 750 George Street could generate about $40 million for the Hong Kong-based owner.
The approval allows for 123 hotel rooms and 687-square-metre of premium George Street retail space, with the building’s podium design preserving the site’s existing heritage facade.
CBRE’s Nicholas Heaton, Gemma Isgro, Nick Wheatley and Andrew Jackson have been appointed to steer the sale process in conjunction with Knight Frank’s Mr Bowie Wilson and Mr Ong.
Mr Heaton said the development site’s positioning within Sydney’s CBD suggests rents for both retail and hotel tenants will achieve premium rates.
“The wealth of amenity surrounding the building will be enhanced over the coming years with the completion of over $18 billion of government infrastructure,” Mr Heaton said.
“Located just 250 metres north of Central Station, the development site will benefit from improved connectivity through the Sydney Metro and Sydney Light Rail – with the Haymarket Light Rail stop conveniently located on the doorstep of 750 George Street. These significant transport upgrades will positively transform the immediate vicinity.”
