The City of Sydney council has bought the former Redfern post office for $5.3 million, with plans to convert it into an Aboriginal and Torres Strait Islander cultural hub.
The 330-square-metre building at 119 Redfern Street has doubled in value since it last traded for $2.6 million in late 2014.
It was most recently marketed with price expectations of about $5 million for potential retail and office mixed use.
Lord mayor Clover Moore said Aboriginal and Torres Strait Islander people had been seeking a space to share and practise their cultures.
“We’ve been searching for an appropriate property for an Aboriginal and Torres Strait Islander cultural space for some time and I’m pleased we’ve secured such an iconic landmark in Redfern,” the lord mayor said.
“We’ve long advocated for the state and federal governments to commit to an Indigenous cultural centre of national significance and I hope our news today will encourage them to take action.”
The location of the building is close to several key Aboriginal organisations, including the Aboriginal Medical Service Redfern.
Colliers International selling agent Trent Gallagher, who sold the property with Tony Crane, was not surprised at the capital growth.
“Obviously, the market in Sydney has doubled in the past five years even for commercial and industrial, and not only that, they spent a lot of money on the fitout as well,” Mr Gallagher said.
He noted that buyers were willing to pay a premium for buildings with character or history.
The vendors, architecture firm DKO, will be leasing the premises back on a short-term lease until mid to late 2019, with the property selling on a 4 per cent yield, which Mr Gallagher said was the standard in that market.
The City of Sydney will develop a plan for the best use of the property for the local Aboriginal and Torres Strait Islander community before DKO moves out.
DKO sold the property due to its staff nearly doubling in the period they have occupied the building. The firm refurbished the space extensively into a modern office after they bought the site.
He added that the property appealed to the council because of the suburb’s strong Indigenous community and the building’s state heritage listing.
“It’s a very top-shelf fitout and they liked the idea that they could just move in to it,” he said.
The former post office is “considered to be significant to the community of Redfern’s sense of place”, according to the building’s heritage record.
The agents handed out about 10 contracts and received more than 100 inquiries.
Other interested buyers included investors, pub owner-occupiers and companies which wanted to use it as an office.
The Victorian Italianate-style building was constructed in 1882. Much of the original period details still remain, including the timber ladders leading up to the four-storey clock tower, a small window upstairs, ornate plaster cornices and the pressed metal ceilings.