Fortis adds heritage-listed Gaden House in Double Bay to it office holdings
Boutique developer Fortis has paid about $20 million for a heritage-listed office complex, its second acquisition in Sydney’s salubrious Double Bay in the past 14 months.
It plans to undertake a $6.5 million refurbishment of the Neville Gruzman-designed building and hold the asset long-term as part of its growing city fringe commercial portfolio.
The developer, a subsidiary of Pallas Group which primarily focuses on the residential market, purchased Gaden House at 2A Cooper Street, in a transaction negotiated by Peter Leipnik and Alexander George of BadgerFox.
Thousands of people, including Double Bay residents and members of the architectural community, signed an online petition objecting to the development.
Woollahra Council subsequently moved to have Gaden House, including its interiors, listed as a heritage item under the Woollahra Local Environmental Plan in 2019.
The property has housed many high-profile tenancies on its ground level, including well-known celebrity restaurant and bar Pelicano, which closed in late 2019. Prior to that it had housed bars including The Regent, Doubles, The New Regent and Planet Bollywood.
Gaden House was also the location of Carla Zampetti’s first Australia boutique.
Fortis plans to upgrade the three-storey building in mid-2021, pending planning approval, which will focus on restoring the exisiting structure and see new retailers installed on the ground level.
The project will bring the 1968-built building up to compliance and restore elements including the facade, concrete staircase, metal-clad louvres, terrazzo podium and feature lighting circles.
The acquisition, which took place in September in the midst of the pandemic, is a vote of confidence in Sydney’s city fringe market, according to Fortis director Charles Mellick.
Mr Mellick said the company anticipated an uptick in demand for boutique, low-rise office blocks in the wake of the COVID-19 crisis but predicted businesses would still gravitate to city centres.
“We are seeing a range of businesses who want to be located in city-fringe locations, closer to home and including unrivalled amenity,” Mr Mellick said.
“A few key factors behind the locations we are currently developing are great traffic links, access to natural light and parking amenity.
“I do not foresee that the desire for city-centred locations to drop because of COVID-19. There will be a resurgence in all cities at some point in time.”
Fortis plans on holding onto the block post-refurbishment, adding the property to a commercial portfolio which includes other city-fringe investments such as Pallas House Sydney, at 30-36 Bay Street, Double Bay, which it acquired in 2019 for a reported $32 million.
Other commercial holdings include Pallas House Melbourne in South Melbourne, and The Foundry in Clifton Hill.
“We will retain Gaden House as we do with all of our commercial assets. We are open to whole-floor leases as well as tenants who want to take the entire building,” Mr Mellick said.
The mid-century modernist Gaden House sits on a 386.7-square-metre corner site with frontages to Cooper Street, Brooklyn Lane and Bay Street.
Mr Mellick said the developer would draw on its experience in the residential space to create a high-end experience for future tenants.
“At Fortis, we have mainly focused on high-end residential, however, we have started taking this approach to the commercial sector too,” Mr Mellick said.
“Gaden House offers us a unique opportunity to demonstrate our honed experience in high-end residential development to a rare example of 1960s commercial architecture … We are dedicated to restoring and elevating the Gruzman masterpiece as an icon of Double Bay,” he added.
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