A prime slice of retail space opposite Australia’s most famous beach is one of 16 properties set to go under the hammer at Burgess Rawson’s September portfolio auction on Tuesday, September 17.
The shop – 5/84 Campbell Parade, Bondi Beach, currently leased to Italian restaurant Cento Per Cento – is set to test investor appetite for real estate along the tightly-held beachfront strip almost three years after a string of high-profile sales and just months before work on the Bondi Pavilion upgrade could finally get underway.
Domain Group records show that shop is one of the few commercial properties put up for sale in Bondi Beach so far in 2019, with market activity before that primarily involving large commercial players and eight-figure price tags.
In April this year an entire block on the corner of Warners and Wairoa avenues (just across from Campbell Parade) consisting of three apartments and two retail shops sold for $9.68 million.
The nearby former Bates Milk Bar site sold for $19.12 million in 2017 to a consortium of buyers including Allen Linz, Eduard Litver and Gil Baron – the same group behind The Bondi and Pacific Bondi Beach apartment developments.
Another property at 110 Campbell Parade – then known as the Bondi Backpackers – sold to hostel family the Milletts in late 2016 for a price believed to be north of $15 million.
But this 84-square-metre strata property is expected to prove popular with a very different class of buyer.
Investors, including those buying in their self-managed super funds and interstate buyers, have been particularly attracted to the property’s secure $108,770 net annual income, according to listing agent Simon Staddon.
“There’s been very good interest because of that affordability factor,” he said.
Mr Staddon added that the rarity of an “affordable” listing in Bondi Beach – in the sub-$3 million price range – had contributed to the number of inquiries.
“We’ve been selling this type of stock for 20 to 30 years and I can’t remember the last time we had a listing in Bondi Beach,” he said.
“Any time that we get instructions for a property in the eastern suburbs of Sydney we see a big spike in inquiries.”
Cento Per Cento is in the first year of a five-year lease that expires in December 2023, with a further five-year option and fixed 3 per cent annual rent increases.
Mr Staddon noted an increase in the number of “traditionally residential” buyers, who had made inquiries regarding 5/84 Campbell Parade, as well as a combined cafe and one-bedroom apartment on the lower north shore, at 8 Carter Street, Cammeray, which received about 175 inquiries during the pre-auction campaign.
“It’s a very sought after price point. Some traditionally residential investors in that sub-$3 million bracket have been increasingly looking to commercial after the recent downturn in the residential sector,” he said.
The Cammeray property – currently producing a net annual income of $73,367 – has price expectations “in the mid $1 million range” according to listing agent Tom Doran.
Other Sydney properties scheduled for the auction include the “Butter” restaurant in Parramatta, two shops located opposite the train station in Padstow and a freehold retail building in Rozelle that is currently generating $438,500 a year in net income.
Hunters Hill site sells
The auction comes a month after the sale of the Bistro 54 restaurant and residence, The Granary, was finalised.
The 284-square-metre corner site – which passed in at auction in May – was purchased by Shoalhaven-based private investors for $2.34 million on a yield of 5.9 per cent.
Sales agent Dean Venturato said the sale was evidence of the increased interest in the sub-$3 million sector of the market from both local and international buyers.
“The property had increased attention two weeks prior to the sale where two international investors were outbid by the buyers and missed out on the property,” Mr Venturato said.
The property was sold with a five-year lease to 2021 and options to extend.
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