Posted: 2020-09-18 14:00:00

Mr Kernahan, Steam Leung, Joseph Lin, and Mr O’Neill said they have two very different opportunities in the western corridor of the Sydney CBD available for sale that tenants could acquire to not only control their accommodation costs but raise their corporate profile.

One is 230 Sussex Street, being a refurbished freehold heritage property opposite the three Darling Park office towers that comprise about 962 sq m building area and on-site parking.

The property comprises two buildings separated by a courtyard, previously a horse and carriageway accessed by a cartway through the Sussex Street front building.

"Highly attractive heritage buildings are rare and in this case an investor or owner occupier have all of the hard work done and they can take possession immediately," Mr Kernahan, national director, investment services at Colliers International said.

The site at Level 10, 51 Druitt Street is a whole strata floor of 1,185 sq m including six parking strata lots that can accommodate up to 10 cars.

"The rarity of 51 Druitt Street is that for an occupant wanting a whole strata floor in excess of 1,000 sq m in the Sydney CBD there are only three buildings in existence," Mr Kernahan said.

"The other two however include a leasehold property and one in which a developer is looking to buy out the balance of owners."

The Colliers team has analysed and compared the accommodation costs of this strata floor for a tenant versus an owner occupier and found the owner occupier pays less in total costs than a tenant would in rent.

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"The low interest rate environment is making buying a viable option for many of today’s tenants," Mr Kernahan said.

In the sector deemed essential services, such as child care centres, petrol stations, and bank branches, sales have broached the $1 billion mark in the past year, according to the Burgess Rawson auction results.

Another recent sale was of a fast-food McDonald’s site Bella Vista to a private investor from Melbourne for $6.65 million on a net yield of 3.1 per cent, through Paul McGlynn and Harry Bui of Colliers International.

McDonald’s site Bella Vista was sold to a private investor from Melbourne for $6.65 million

McDonald’s site Bella Vista was sold to a private investor from Melbourne for $6.65 millionCredit:suppplied

"Private high net worth investors are the most common buyer profile within the sub-$20 million investment market, while both property syndicates and consortiums showed increased interest towards premium investment assets with longer weighted average lease expires and company leases to national blue-chip corporate tenants," Mr Bui said.

"The continued stability and lowered-risk of this asset class places premium investments in a strong position for the future."

Mr Bui is also selling two service stations including the Shell in Norwest being built by Mulpha and the brand new BP in Newcastle Port being developed by Stevens Group.

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