More competition for strata offices in Sydney's CBD as market continues to tighten
A small office suite in one of Sydney’s tallest heritage-listed former warehouses is set to go under the hammer next month in what could prove a test of the strength of the owner-occupier strata market.
Suite 306 in the recently renovated Reid House, located at 75 King Street, is slated for auction on June 4 with a guide of $850,000.
Listing agent Tim Noonan, of Noonan Properties, said strata assets are “always appealing’ to owner occupiers such as accountants and other small businesses, although changes to strata legislation in NSW have resulted in a new level of competition for the asset.
“It’s a relatively small market and the market is getting smaller. Developers are starting to buy strata buildings with the aim of redeveloping them,” he said, referencing changes that allow a building to be redeveloped with the consent of 75 per cent of a strata scheme.
The vendor, Kerry Wonka, had previously used the 75 square metre space as headquarters for his business, training resources company Future Media. The suite last traded about 10 years ago, according to Mr Noonan.
The suite has been given a fresh lick of paint and new carpet. Photo: Supplied
Mr Noonan, who said that his company handled close to 50 per cent of the strata office transactions in Sydney, advised that the market had been strong in the first quarter of 2019 with business owners still inclined to buy in the current environment of record-high office rents in the city.
JLL recently reported that it expects the overall office vacancy rate in the Sydney CBD to reach 3 per cent by the end of 2019, with the current vacancy rate sitting at its lowest level since 1989.
Recent transactions include a 55-square-metre unit at 155 King Street which sold for $771,000 and a 170-square-metre-unit at 50 Clarence Street, which sold for $2,050,000.
Mr Noonan said that the typical strata office suite ranged between “$1.5 million and $2 million”, but the smaller size of suite 306 would likely see it sell for less.
Designed by Sydney architects McCredie & Anderson, Reid House was constructed in 1906.
It was converted into offices in 1936 and is a rare example of early strata in Sydney, with later additions including shop fit-outs and windows – described as ‘unsympathetic’ by the heritage listing – added in the 1980s.
Reid House was converted into offices in the 1930s. Photo: Supplied
The property has recently undergone more than $1 million of building restoration, with funds provided through the City of Sydney Heritage Floor Space Scheme (HFS).
The HFS is an incentive scheme offered by the City of Sydney and is granted to heritage-building owners who complete repairs or renovations to their building. Building owners can then sell HFS space on to developers who need a grant as part of their development application.
Heritage architect Hector Abrahams explained that the renovations had been completed in time for Reid House to capitalise on new transport links in that part of the city.
“The owners were keen to keep pace with high-end neighbours and to maximise potential with the new light rail nearby. The funds have allowed them to make significant enhancements,” Mr Abrahams said.
The new work includes a reinstated red steel awning at street level; an enlarged foyer with a new slot window on the side bringing in natural light; new shopfronts based on original designs; new windows to unify the façade; and new signage.
The suite itself features new carpet and lighting.
