Two retail properties with views of the iconic Finger Wharf in Sydney’s Woolloomooloo, and leased to national pizza chain Domino’s and the cafe L’Expresso House, have hit the market.
The properties at 65 Cowper Wharf Road are part of the mixed-use development The Anchorage, which was completed in 2015.
The properties, which cover a combined 250 square metres and include six parking spaces, will be unveiled to the market next week.
Listing agent Miron Solomons, of Colliers International, said the sale was a “test for the market” following the COVID-19 pandemic, with the agency recently witnessing an increased number of inquiries from investors who were new to the property market.
“It is a true flight to quality for investors in our market and an asset on Sydney Harbour, with national tenants who are trading the house down during these times, will obviously tick all the boxes,” Mr Solomons said.
The Domino’s chain reported a jump in earnings of 7.3 per cent and sales growth of 12.8 per cent for the 2020 financial year, despite incurring $14.4 million in costs for in-store cleaning and supporting franchisees during the pandemic.
Mr Solomons declined to provide a price guide for the property. The combined net income is about $250,000 a year, with annual rental increases.
Mr Solomons said the vendor had chosen now as the ideal time to list the property considering the performance of both tenancies during the pandemic, given the performance of Domino’s nationally and citing recent reports of from analytics firm AlphaBeta and credit bureau illion that show cafe purchases in NSW are now higher than before the coronavirus crisis.
“It’s an opportunity to capitalise on the current investor demand for assets of this calibre,” he said.
“2020 has obviously refined investor appetite with key fundamentals going under the magnifying glass, these fundamentals are also closely considered by lenders and valuers alike,” he added.
Access to “cheap debt” courtesy of record-low interest rates was one of the factors helping to stoke this demand, according to fellow listing agent Matt Pontey.
“We have seen traditional candidates such as private investors, funds and syndicates competing with new entrants in the property market. These are made up of investors who perhaps see volatility across other investment classes or even geographical locations,” he said.
Both tenancies have been in place since the building’s completion, with “long-term leases” in place.
Mr Pontey said it was rare for commercial properties in the Wolloomooloo harbourfront precinct to come on the market, with the majority of land being tied up with the Department of Defence and the Sydney Harbour Foreshore Authority.
“It’s incredibly rare to be able to acquire retail with tenants of this calibre at this level considering the demand for harbourside retail, dining and luxury living,” Mr Pontey said.
He said both assets also enjoyed “significant trade” from the naval base opposite the property.