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News release

Sydney

A Waterloo investment opportunity has sold for AUD46.6 million

An investment property located at 1029-1035 Bourke Road, 723 Elizabeth Street and 409 George Street has sold at a fully leased yield of 6.36 per cent net


​​SYDNEY, 4 November, 2014 – A prime investment property located at 1029-1035 Bourke Road, 723 Elizabeth Street and 409 George Street in South Sydney’s Waterloo has sold for $46.6 million, with a fully leased initial yield of 6.36 per cent net, to a Chinese developer based in Shanghai.

JLL’s Head of Metropolitan Sales and Investments for NSW Sam Brewer and Colliers International National Director of Industrial Michael Crombie handled the transaction.

According to Mr Brewer, this was a highly competitive sale achieving an aggressive yield.  “We received eight offers for the opportunity, with the final offer exchanging within eight days of first round EOI closing. For a suburban investment opportunity, the site achieved an incredibly low yield. 

“This result is a sign of South Sydney currently being the most sought-after fringe markets in Australia,” said Mr Brewer. 

The property sale comes ahead of the closing of expressions of interest for creative commercial office complex The Woolstores in Sydney’s Alexandria, which is also being handled by Mr Brewer and Mr Crombie and is expected to achieve in excess of $50 million with a yield of 7-7.5 per cent. The EOI for this asset closes next Tuesday the 11th November.

“The property at 1029-1035 Bourke Road and 723 Elizabeth Street, Waterloo offered an extremely low-risk, high-value investment and development proposition. Its quality tenancy mix, including Oroton Group, Tarocash, Versace Home, is a significant attraction and key differentiator.

"There is flexibility to develop the property over the medium to long-term – particularly once the City of Sydney’s Green Square project is more mature,” said Mr Brewer.

The property, located just 200m from Green Square Station, is in a prime location to sustain future investment use, or offers a strong location for future residential development. Green Square Station is just one train stop from Central Station, providing direct access to the Sydney CBD.

Mr Crombie said, “This was a highly competitive result which was unsurprising given its immediate solid cash flow and flexible development opportunity, enabling development to be staged as leases expire.

“South Sydney is anticipated to see a decent level of rental growth as the area continues its transformation from an industrial to residential precinct, and this property is no exception, with returns anticipated to fall in line with current market rents. Currently rents are as much as 40 per cent below those found in comparable properties within nearby suburbs including Surry Hills and Waterloo.” 

The property sale comes to the market off the back of transactions of over $1.2 billion of residential development sites managed by JLL across metropolitan Sydney in 2014.