Tiny gelato shop in Circular Quay could serve up new record

Listing agent Andrew Vines of Retail Commercial Consultancy is confident Lot 2 of 1A Macquarie Street will achieve its price guide when it goes to auction, setting a new Australian record for the highest price paid per square metre for retail strata.

A $3 million sale – considered a somewhat entry-level commercial investment for the prestigious precinct – would represent $187,500 per square metre.

“Small shops in prime locations command high prices,” Mr Vines said. 

“It’s a very special location because it’s in a really important part of the city. Anybody that goes to the Sydney Opera House, if you’re going on public transport, you have to walk past the Opera Quays.” 

The previous record was set just last month when a 43-square-metre bubble tea shop in the same precinct sold for $5.7 million, or $135,000 per square metre. 

Colliers agents fielded more than 150 enquiries before the property sold to a Chinese investor. 

Joining the flurry of recent sales activity in the precinct is the listing of another shop, Lot 11, 1A Macquarie Street, securely leased to Guylian Belgian Chocolate Cafe with a net rental of $550,000 per year.

Colliers’ Joseph Lin and Angus Windred, alongside Fiona Yang and Leanne Pan from Plus Agency, are taking the 75-square-metre property to market with hopes it could also topple the existing record. 

“We have received feedback between $11 million and $12 million,” Ms Yang said. That reflects a square metre rate of $146,000 to $151,000, excluding the outdoor dining area.

The national director of Colliers Asia Market, Joseph Lin, said: “We have received genuine local and interstate interest from well-known Asian demographic hotspots with particular influence from Sydney and Melbourne’s affluent high-net-worth privates.”

Mr Windred added that such parties were “strategic investors looking to capitalise on the extremely rare once-in-a-lifetime opportunity” as well as owner-occupiers looking to benefit from the potential initial strong yield and the return of tourism.

With international borders open and cruise ships returning to the harbour, the vibrant Circular Quay neighbourhood is poised to welcome back millions of visitors. 

Mr Vines said retail assets in Opera Quays were tightly held, with two landlords owning a third of the 18 shops with promenade frontage. 

“You can’t buy any other freehold strata on the waterfront in Sydney in such a trophy location,” Mr Vines said. “It’ll never be made again.”

The gelato shop at Lot 2 has a long-term lease until November 2029 with a net income of about $151,000 after outgoings are deducted. It is one of only 10 strata shops in the precinct approved for food and beverage, limiting competition from similar retailers.