Investors in four adjoining Potts Point heritage terraces have made a “spectacular” 40 per cent profit in less than 18 months after selling them to Sydney developer Greencliff for $18 million.
The elegant Victorian terraces running from 20 to 26 Bayswater Road were snapped up for $12 million by a consortium of investors including Eagle Property Group and hotel entrepreneur Paul Fischmann in November 2015, with the deal only settling in March last year.
Mr Fischmann, one of the fund’s largest investors, said the asset had turned a “spectacular profit”.
“We all knew it was a shrewd acquisition but a result like this is truly exceptional. My congratulations to the Eagle team,” said Mr Fischmann, CEO and founder of 8Hotels.
“In 18 months unit holders in Eagle Property Group’s Bayswater Road asset have seen a total return of over 40 per cent. And that is after all fees and expenses,” he said.
Greencliff executive chairman Dr Stanley Quek, the former CEO and chairman of Frasers Property Australia, said the acquisition was an investment in an urban area ready for regeneration.
“Bayswater Road is well and truly in the midst of transformation. It will become one of the city’s most aspirational destinations to live, offering a sophisticated, exclusive inner-city lifestyle,” Dr Quek said.
While the recent introduction of controversial inner Sydney lockout laws has angered pub operators, they have been welcomed by property developers and hoteliers in late-night hotspots like Kings Cross and Potts Point.
Earlier this year, Jude Turner, the wife of billionaire Flight Centre founder Graham ‘Skroo’ Turner, launched a new high-end Spicers hotel within similar heritage-listed Victorian residences just around the corner from where Mr Fischmann and Eagle Property made their massive windfall.
“I think the lockout laws will be a positive for our new operation in Sydney,” Mrs Turner told the Australian Financial Review, “I’m very happy about the lockout laws as they will clean up and quieten the streets.”
Lawrence Kopping, managing director of Eagle Property Group, was equally pleased with the result achieved for the Bayswater property. Mr Kopping said the market had “of course been kind to us” but that much work had been done since they acquired the buildings.
The fund spent about $200,000 on refurbishing the properties, which are leased to a variety of tenants including the well-known World Bar and Candys Apartment night club.
“We greatly improved the asset, not only aesthetically but also by repositioning it in the market. It has taken a lot of energy and the reward is most welcome,” Mr Kopping said.
“It’s sad to see it go as it gave us great pleasure restoring dignity to these special buildings. We know it will have many years of good returns ahead of it but as managers we have to make the best the decision for our unit holders.”
The property was marketed by Daniel O’Brien of LJ Hooker and Jonathan Vaughan and Richard Garland of Knight Frank. They are fully leased with a WALE of 2.5 years, and the potential for future residential development or conversion to a hotel.
Leisha de Aboitiz, a partner at law firm Massons, acted for Eagle Property Group on the sale.