Darwin transit centre sale sets new Top End price record
It’s the heartbeat of Darwin – and now the major shopping and entertainment block on the city’s main artery of Mitchell Street has set a new Top End price record with its sale.
As property prices soar and rents reach a six-year high after a flood of migration to the Northern Territory capital, largely as a result of its perception as a COVID-19 safe haven, the 6200-square-metre Darwin Transit Centre was snapped up for $16.25 million.
No fewer than 17 bids were received in the expressions of interest campaign from keen local buyers as well as others in Sydney, Melbourne, Perth and Adelaide, and as far afield as Singapore and Vietnam.
“A lot of new capital is very keen to enter the Darwin market now,” said Sam Biggins of Colliers’ restructuring services team. “People see the NT as having borne COVID pretty well and, with the increase in its population, spending is rising and there are some good buying opportunities.
“I think in the past people may not have paid Darwin much attention, largely because of geographical reasons. But now the local economy looks very strong with tourism and the defence industry and big federal and territory government spending, so its profile has soared.”
The transit centre came onto the market as a result of a receivers’ sale from previous owners GAJ Nominees. On a 7740-square-metre landholding, with dual street frontages and a 90-metre height limit, it was marketed as having plenty of scope for redevelopment and expansion.
Yet even in its current form, it attracted a lot of attention. In such a central location and anchored by the Australian Venue Co’s Shenannigans Irish Pub – known colloquially by locals as ‘Shags’ – with two backpacker hotels, with around 475 beds, and a range of retail, food, drink and entertainment venues, it offered more than $1.4 million per annum, plus GST, in holding income. Its sale price represented $2100 per square metre with a 6.09 per cent yield.
“There’s no doubt it performed so well as a testament to how Darwin is now viewed with so much optimism, and as a result of conversations about land rates, yields, interest rates and the dynamics affecting tenants,” said Craig Inkster, director of Colliers Darwin.
“The uplift in trading conditions has been to the benefit of most of the tenants with Australians travelling so much more internally and filling the backpackers’ resorts and that patronage flowing on to the pubs. So now there’s a huge amount of positivity in the landscape. In my 10 years with Colliers, this was the strongest response to a sales campaign I’ve ever seen.”
The buyers were locals, the prominent Venturin family who’ve owned cattle properties in the Northern Territory as well as a number of business investments. It’s not known yet whether they plan to redevelop the block or hold as is.
There’s potential too to subdivide the corner site holding at 69 Mitchell Street and redevelop part of it without affecting the majority of tenants.
“They certainly saw this as a great strategic investment,” Mr Biggins said. “It’s a great sales benchmark for Darwin.”
