Tiny gelato shop in Circular Quay scoops up retail record with $2.96 million sale
A 16-square-metre gelato shop has been scooped up at auction for $2.967 million, smashing the record price per square metre for retail real estate.
The Circular Quay precinct, on the doorstep of the Sydney Opera House, is a hotspot for deep-pocketed private investors, with three consecutive record-breaking strata sales in as many months.
Lot 2 of 1A Macquarie Street attracted 135 enquiries over its sales campaign, said Retail Commercial Consultancy’s Andrew Vinex.
Seven parties attended the auction on Tuesday evening, with a private investor from Melbourne beating out a Sydneysider for the keys.
Mr Vines said the shop was a “perfect storm”, priced at the lower end of the spectrum for inner-city retail while offering a return on investment in a low-interest-rate environment.
“Even though [interest rates] are going up, they’re still at historically low levels,” Mr Vines said. “There’s still a lot of people looking for return on investment, who have cash to spend.
“I had people with $3 million in their super funds thinking about buying it with cash.”
The vendors, a family from Sydney, owned the shop for 20 years, during which it was never vacant and the current leaseholders had survived the testing times of COVID.
The shop was sold with a long-term lease until November 2029 with a net income of about $151,000 after outgoings.
The final price fell just short of the $3 million price guide but still represented $185,000 per square metre, a whopping 20 per cent above the record set just one month ago.
The Guylian Belgian Chocolate Cafe on Sydney’s Circular Quay sold ahead of its auction last month for $11.5 million, a rate per square metre of $153,358.
Colliers national director of Asian markets Joseph Lin brokered the sale alongside colleague Angus Windred, and Plus Agency’s Peter Li, Fiona Yang and Leanne Pan.
Mr Lin said the cafe at Lot 10 had sparked interest among Sydney’s and Melbourne’s high-net-worth individuals, with four parties narrowly missing out.
Earlier this year, a 43-square-metre bubble tea shop was snapped up for $5.7 million, setting a record at $135,000 per square metre.
There are 18 shops in the esteemed precinct, 10 of which are approved for food and beverage. It has earned a reputation as one of the most expensive and competitive retail markets in Australia, Mr Lin said, with Colliers and Plus Agency transacting $21.25 million on Macquarie Street in a matter of months.
As international visitors and cruise ships return to Sydney Harbour, the exclusive Circular Quay precinct is a prime retail destination boasting one of the country’s highest volumes of foot traffic.
