Sydney retail, dining hive Darling Square on the block
Property giant Lendlease has put the leasehold of its popular Darling Square precinct in Sydney’s city fringe on the block, with a price tag of $95 million.
The 9639-square-metre site is 100 per cent leased to a variety of 44 tenants, such as bubble tea outlets, ice-cream and dessert bars, along with popular mainstays such as McDonald’s and Starbucks.
Lendlease developed the area in 2019 and it is a mix of 1500 apartments, 26,000 square metres of commercial office space, 12,000 square metres of retail community and leisure areas as well as 1300 student accommodation beds and a 590-room luxury hotel.
The property group has, over the years, received unsolicited approaches from potential buyers and has decided to place the leasehold of the property on the open market.
Given its proximity to the Darling Harbour precinct and the Haymarket and Chinatown districts, the retail and dining zone has annual sales of $64.7 million, equating to a turnover of $18,126 per square metre. Over the past year to August it has recorded a 61.8 per cent increase in sales.
Colliers’ managing director of retail capital markets, Lachlan MacGillivray, is marketing the leasehold interest in Darling Square retail on behalf of Lendlease.
“Australian CBD retail precincts are some of the most tightly held, with investment opportunities of this scale, quality and reputation extremely rare,” MacGillivray said.
“Underpinned by strong sales productivity and sustainable occupancy costs, the precinct has a secure platform for substantial rental growth.”
The most recent sale of a retail precinct was the Manly Wharf in June by the private developer Robert Magid’s TMG Developments to the owners of Brisbane’s Howard Smith Wharves for $80 million.
The heritage listed Manly Wharf was originally constructed in 1855 as a passenger terminal for the Sydney to Manly Ferry. It has since been transformed into a hospitality destination, which is home to an array of venues including Queen Chow, Hugos and the Manly Wharf Hotel.
CBRE’s Simon Rooney and James Douglas negotiated the sale on behalf of TMG Developments.
Meanwhile, the private EG Funds has listed its Mungo Scott Building at 18 Flour Mill Way in Summer Hill for sale. Originally constructed in 1922 and operated as a flour mill and silo, the heritage building has been converted into a modern commercial office building, with retail on the ground floor.
The owners, who tested the market in 2019 with a price tag of about $30 million, have spent $10.5 million on refurbishments including new air conditioning, mechanical services, modern stairs and a lift, and a further $2.3 million on new fit outs in the six-storey property.
Knight Frank’s Jonathan Vaughan, Anthony Pirrottina and Demi Carigliano and GJS Property’s Jason Wright, Chris Bailey and Liz Assadourian are agents on the sale of the building, which is 84 per cent occupied by 15 tenants, all of which are small to medium enterprises.
Knight Frank’s Pirrottina said a large outdoor forecourt forms part of the title and presents opportunities for future value add at the property, including an additional boutique commercial building, subject to approval.
“There may also be future strata subdivision and sell down of the building, providing an additional exit strategy for an incoming purchaser,” he said.
