Darlinghurst development site passes in at $6.5 million
Some of Sydney’s biggest developers were there, but it wasn’t enough to get a deal done by lunchtime for a former warehouse site in Darlinghurst’s Palmer Street.
Bidding for the 420 square metre site started at a conservative $5 million before soon petering out at a $6.5 million vendors bid issued by auctioneer Jesse Davidson, as developers such as track-pant clad Theo Onisforou (the owner of the nearby Astoria Hotel) watched on in silence.
Mr Onisforou lost out to the same consortium behind The Bondi last month for the former Bates milk bar in Bondi’s Campbell Parade, which sold for $19.12 million, but appears unperturbed judging on his appearance at Palmer Street.
Auctioneer Jesse Davidson outside the Burton Street entrance to the building. Photo: Supplied
CBRE’s Nicholas Heaton had initially said “It’s definitely going to sell today, if not at the auction then after” but fellow agent Gemma Isgro reported that they were still in negotiations with an unnamed buyer on Friday afternoon, with an outcome not expected until next week.
One thing that’s almost certain, the site, which has two DA approvals in place, is destined to end up as apartments.
Inside 278 Palmer Street. Photo: Supplied
The auction failed to attract quite the same buzz as a similar one last month in Crown Street – where a local consortium paid $4.7 million – a fact CBRE’s Michael Khouri attributes to the larger site size.
Onlooker Paul, who did not wish to disclose his last name, has invested in the eastern suburbs in the past and attended both auctions.
He too would turn the site into boutique apartments, despite Mr Khouri’s claim that there was scope for commercial development too, capitalising on the rarity of a big site in a tightly held suburb.
“Look around. They’re not building sites like these anymore,” Paul said, motioning to the surrounding apartment buildings.
A theatre company and art gallery had previously occupied the site. Photo: Supplied
However, the presence of existing DA’s – one to split the property into two torrens title lots, the other into five, put him off.
“I really like to go through the DA process myself. That’s where the cream is. You can make a 20 per cent return from on-selling to developers with a DA in place.”
The former home of the TAP gallery, now located in Surry Hills, last sold in 2015 for a reported price of $3.9 million according to Domain Group records, backing up Paul’s claims.
