Food and beverage properties on the menu at Burgess Rawson's Sydney portfolio auction
Food and beverage sites will be on the menu of investors at one of the final commercial property auctions of the year.
The properties, including a Mexican restaurant in Potts Point and a mixed-use building on Newtown’s King Street, are slated to go under the hammer at Burgess Rawson’s Sydney’s December portfolio auction on Tuesday, December 10.
“All four properties are in world-famous locations, known for their spectacular night life and thriving food culture,” said Burgess Rawson director Darren Beehag, adding that the auction would be the “last chance to purchase a secure investment in a terrific location this side of Christmas.”
Mr Beehag said that inner-city properties that house cafes, restaurants and bars were becoming increasingly sought after with buyers.
“Food and beverage outlets are becoming more and more popular, and the demand won’t be stopping any time soon, particularly in areas such as these where nearby residents have high disposable incomes and that attract tourists and business people.”
The Potts Point property at 7/33 Bayswater Road, currently leased to Mexican restaurant ‘Chula’, on a five-year lease to 2022 plus options to 2032, is currently producing an annual income of $193,000.
The combined retail and residential premises at 303-305 King Street, in Newtown, redeveloped in 2019, is also expected to be popular with those keen to secure a foothold near the busy Newtown train station.
“We expect healthy bidding from buyers who are keen to secure well-placed and strong trading food-and-beverage investments,” Mr Beehag said.
The remaining two properties are located within luxury apartment towers. The first, Potts Point’s ‘Omnia’ building at 5/111 Darlinghurst Road, is leased to the “Royal Bakery” on a new seven-year agreement at $134,070 a year, with 3.5 per cent annual increases. The other, at 6&7/168 Kent Street, is a licensed restaurant within the ‘Observatory Tower’ building in the CBD, which is returning $217,620 is year.
National tenants attract interest
Altogether, 18 properties are listed for auction on Tuesday.
Away from the food-and-beverage sector an Officeworks site in Mona Vale, on Sydney’s northern beaches, is getting attention from investors attracted by its ‘blue-chip’ status, according to Burgess Rawson director Simon Staddon.
“The rare freestanding opportunity leased to Wesfarmers has enjoyed substantial enquiry in the last month,” he said.
Officeworks has leased the site since 2002 and the current lease extends to 2024, with options until 2028. The property is currently generating $784,000 a year.
“There is always a spike in enquiry levels for assets of this quality because there are plenty of high-net-worth buyers seeking set-and-forget investments, and this Officeworks asset is a perfect example.”
Away from Sydney, a freestanding industrial asset leased to BOC Limited in Mount Isa, in Queensland, for $155,000 has generated strong interstate interest, according to Mr Beehag.
BOC commenced a 10-year lease at 1A Traders Way in August 2019, with options until 2039.
The final Burgess Rawson Sydney portfolio auction for 2019 is scheduled to commence from 11am AEDT on Tuesday, December 10, at Doltone House Hyde Park, 181 Elizabeth Street, Sydney.
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