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Office deals in the city fringe of Sydney are setting records. Investors and developers are taking advantage of demand for high-quality sites which offer flexibility for workers who opt to stay closer to home and avoid long commutes.
One of the largest to be offered is the home of The Winery bar at 285a Crown Street, Surry Hills, in Sydney’s inner city. Known as Reservoir on Crown, the three-level block is being sold by fund manager LaSalle Investment Management. No price was disclosed, but expectations are for around $110 million.
It will be taken to the market by Knight Frank agents Paul Roberts, Jonathan Vaughan, Tim Holtsbaum and Dominic Ong with JLL agents Mitch Noonan, Luke Billiau, Sophie Tieman and James Aroney.
Reservoir on Crown at 285a Crown Street, Surry Hills, is expected to fetch around $110 million.
The fully leased Reservoir on Crown was built in 1960 and redeveloped by Mirvac in 2009, stands at 4727.6 square metres and sits on a 3058 square metre block, one of the largest in Surry Hills. Aside from the popular The Winery, there is a cafe as well as 11 office tenancies.
Knight Frank’s Paul Roberts said investors would be drawn to the high-performing asset as it provided both security and growth, underpinned by a 100 per cent occupancy rate and a weighted average lease expiry (WALE) over six years, with future development upside.
“It offers value-add options for buyers too, including the potential for further rental reversion or the opportunity to subdivide the existing winery and cafe from the main building to sell to an owner-occupier or investor,” Roberts said.
JLL’s Mitch Noonan said Reservoir on Crown, situated on a prominent site, had long been known as the premier building in Sydney’s fringe market.
“Fringe assets of this scale and quality are extremely rare, and are typically very tightly held by generational owners in Surry Hills, so we expect this asset will be very well-received by investors looking to get exposure to the city fringe market,” Noonan said.
Data from JLL Research shows Sydney’s fringe market has been one of the strongest performers in Australia, with an annual net face rental growth rate average of 5.9 per cent each year between 2012 and 2022.