124 Queen Street, Woollahra is expected to fetch in excess of $6 million. Photo: Supplied

Woollahra shop abandoned by Woolworths expected to fetch more than $6m

Jack Needham|Apr 17, 2019

A partially-tenanted commercial building in the centre of Woollahra, in Sydney’s up-market eastern suburbs, is set to fetch more than $6 million when it goes to auction at the end of the month, despite a high-profile tenant pulling out.

The ground floor of 124 Queen Street, Woollahra, had been slated to become one of Woolworths’ latest Metro stores, but unresolved issues concerning truck loading points with Woollahra Council saw the supermarket giant decide not to move in, leaving a 220-square-metre empty shell suitable to a variety of uses, according to listing agent John Knott of Laing and Simmons Woollahra.

Demand for food operators in prestigious Queen Street had increased as signs that nearby Oxford Street was reemerging as a dining hotspot, and the success of other Queen Street businesses such as butchery Victor Churchill, he said.

Mr Knott has already fielded interest from an ice creamery as well as restaurant operators for the site.

But he said the space would also be ideal for a medical centre, offices, studios or retail operations, subject to council approval, with the potential to develop the ground floor into separate shops.

Upstairs, which is tenanted to the Classic Safari Company. Photo: Supplied

The space was previously leased to the Buzy Bakehouse for $270,000 gross a year, but the new amount was expected to be $200,000.

Level two is leased to the Classic Safari Company, and the property also houses a Westpac ATM, bringing in a combined gross annual income of $180,000 a year.

Mr Knott is expecting the building to fetch more than $6 million, given his recent sale of 170 Queen Street – leased to The English Tapware Company – for $5.5 million on a 3.8 per cent net yield.

Retail outlets in the area had had mixed success in recent years, with boutique brands such as nearby Anna Thomas tending to outlast chain stores.

“It’s a very busy spot, there’s quite a few of the top labels going there. The ones where you can go anywhere to buy don’t seem to work as well,” Mr Knott said.

However, the usually tight-held street had been subject to a raft of big-ticket sales in the past year, as strong buyer confidence in the local residential market spilled over into commercial buildings, he said, although the owner of 124 Queen Street was unlikely to see large capital gains, having purchased the property for $5.9 million in 2003.

Other sales along Queen Street in the past year included 96 Queen Street, which sold for $3,815,000 in May, 92 Queen Street for $5.2 million in the same month, 74-78 Queen Street for $8.35 million in October 2015, and 42-44 Queen Street for $5.6 million in November last year.