Quest Castle Hill serviced apartment block for sale for the first time in 12 years
An block of 79 serviced apartments leased to Quest in Sydney’s Castle Hill is on the market for the first time since its construction 12 years ago.
No price was disclosed for the property at 8 Gladstone Street, which is on a single title, but comparable sales include Quest Griffith, in southwest NSW, in February this year, which fetched more than $15 million on a 7.3 per cent yield.
Similarly, Quest Newcastle was acquired for some $16 million in July 2017 on a 7.2 per cent yield.
The net rental is soon set to hit more than $1.3 million a year. Photo: Supplied
The property measures 4249 square metres in gross floor area across six levels and includes 60 car parking spaces.
It was purpose-built for Quest Apartments as a tenant in 2006 by a private group, which is the owner.
With 4 per cent annual rent increases, the net passing income is set to increase to about $1,315,000 in July 2018. The current lease term expires in July 2021 and renewal options extend the tenancy for another decade.
Knight Frank’s Mark Litwin, who is selling the property with Arland Domingo and Andy Hu, said interest had come from local and offshore buyers, including fund managers and personal investors.
Most were interested in the upside of the income stream, thanks to the Sydney Metro Northwest rail line that will begin running in early 2019.
The building has 79 serviced apartments across six levels. Photo: Supplied
“Certainly the train line that will come into operation in 2019 is the big game changer,” Mr Litwin said.
“Anyone will buy property in that part of the world now, because that train line’s coming in and it’s coming in less than a year’s time.”
The 4204-square-metre site also has development approval for subdivision into 46 strata title commercial lots.
Mr Litwin said that the growth in the area was already happening and buyers were purchasing land around Schofields, Box Hill, Rouse Hill and Kellyville to develop low and medium-density residential projects, which were supported by government planning strategies.
“Certainty has come back into the market with the planning for the Showground Precinct now formalised by Planning NSW. What that does is it takes some of the confusion out of the marketplace, so I think we’re starting to see it get a more practical reality of what the growth could, would, should look like,” he said.
“We’re doing a lot of land transactions in those neighbourhoods right now, so I think for us what’s different about the northwest is that it’s a growth story that is already starting to take shape.
“We already know what the rail line is, we know that people are buying land to build residential development, and we know the planning strategies around it are also supporting that.”
The Department of Planning and Environment’s strategy report on the Northwest Metro projected that the Northwest Metro would deliver 49,500 jobs by 2036.
Deloitte Access Economics’ recent Tourism and Market Outlook indicated that 5500 new hotel rooms and serviced apartments were delivered in 2017 – an uplift of 2.3 per cent to total stock.
Expressions of interest close on April 11.
