A retail property in Sydney’s Chinatown smashed sales expectations when it sold under the hammer at a rate of $73,485 a square metre.
The 35-square-metre cafe at Shop 9, 61-79 Quay Street, Haymarket, secured $2,572,000 at a yield of 3.63 per cent.
Selling agents Khoury and Partners’ Jon Race, Anthony Khoury and Knight Frank’s Andy Hu had been quoting a price of more than $2 million, or $57,142 a square metre, during the campaign.
The buyers, based in Australia, were drawn to the corner location of the property, the long lease term and a price point they considered affordable.
Auctioneer Damien Cooley accepted an opening bid of $2 million, with four bidders pushing up the price before the gavel fell.
Part of The Quay development, the tiny strata property has soared in value by 157 per cent since the vendor Yuan Zheng bought it in 2014 for $1 million.
The corner-block café earns a net annual income of $93,600 plus GST, and is on a 10-year lease with a five-year renewal option.
“For a postage stamp, that sale price is unbelievable,” Mr Race said.
He added that investors were interested because of the strong foot traffic of the location, which is close to the University of Technology Sydney.
Mr Hu pointed out that prime freehold strata retail properties in Haymarket have very low turnover, especially smaller shops.
“Haymarket retail is always sought after and this particular market is very tightly held,” he said.
“There is hardly any retail transactions in the Haymarket area recorded.”
The Chinatown market attracts mostly Chinese buyers based in Australia, who see growth potential in the area from the Darling Quarter and upcoming Lendlease residential projects, Mr Hu said.