Darlinghurst trophy office block set for big sale

Darlinghurst trophy office block set for big sale
Darlinghurst trophy office block set for big sale

A trophy office block in the heart of Darlinghurst is set for a big sale.

The seven level A-grade office block at 19a Boundary Street last traded for $63.5 million in 2017 when it was bought by Haben Property Fund.

It was in 2000 that the warehouse was converted and repurposed as office space, with notable tenants such as creative agency Collider and celebrity chef Donna Hay.

There are 53 tenants in total, with a mix of office and ground level retail and cafe spaces.

Mercer Property and CBRE have been jointly appointed to sell the property that fully leased offers a total lettable area of 6,500 sqm, including a ground floor retail showroom.

It also has secure parking for up to 51 vehicles.

Darlinghurst trophy office block set for big sale

The net passing income is $4,380,311.22 annually, with a rare five per cent annual increase on leases.

The building was recently upgraded, with a new lift and an upgrade of all amenities.  

CBRE agent Harry Georges is marketing the property in conjunction with Mercer Property's Tom Speakman and Matt Davoren.

Georges said he is expecting significant investor interest.

“With low supply and high demand, office vacancy rates have reached record lows across Sydney,” Georges said.

Darlinghurst trophy office block set for big sale

“The vacancy rate on the city fringe has contracted for the third consecutive year to circa 3%, the lowest rate of any commercial market in Australia.

"This is underpinning interest in assets like 19a Boundary Street, which offer strong fundamentals and a diverse tenancy mix.”

George noted that commercial buildings in Darlinghurst were in high demand but rarely brought to market.

“19a Boundary Street also offers significant upside, with scope for a considerable uplift in the existing rents and potential for a future exit strategy via a strata subdivision,” Mr George said.

“Given the building’s location, a conversion to a boutique hotel would be another possibility subject to the relevant planning approvals.”

Darlinghurst trophy office block set for big sale

Mercer Property agent Tom Speakman said creative buildings are in short supply.

“The Sydney market is experiencing above-average demand for heritage and creative stock,” Speakman said.

“As the lines between work and play continue to blur, occupiers are increasingly looking to grow their businesses and retain talent in creative commercial spaces such as 19a Boundary Street, which are surrounded by superior amenity and new restaurant and bar concepts.”

“The building’s tenancy profile has the potential to provide either an owner-occupation opportunity or allow an incoming purchaser to rework a large portion of office space.

“Leasing to a single, whole building tenant or whole floor tenancies offers the advantage of picking up an additional 15% of net lettable area – all while bringing rents up to market.”

 

 

 

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

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Darlinghurst Office Listing

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