Chinese buyer secures Double Bay retail jewel on 4.8% yield

Sydney's Burgess Rawson portfolio auction secured $43 million worth of property sales yesterday with yields as low as 4.5%.

Of the 19 NSW properties, auctioneer David Scholes knocked down 11.

The Double Bay offering sold to an offshore Chinese buyer for $13.1 million reflecting a yield of 4.8%. There are long standing anchor tenant, ANZ – with options to 2033 on one of the largest blocks of land on 7-9 Knox Street.

The 478 square metre property, still known as Kennedy House, given the retail outlet of the luxury jewellery retailers the Kennedy family.

It has a 778 square metre net lettable area with a value add FSR 2.5:1 potential.

Most of the tenants were on annual 4% rent increases with a current net income of $628,576 per annum plus GST.

Burgess Rawson agent Michael Gilbert marketed the property in conjunction with Allan Levy of Metro Commercial.

Gilbert told the Australian Financial Review a third of contract requests had come from Chinese buyers. 

The ANZ Banking Group initially leased a 372 square metre space from the then landlords Louis Kennedy and Andrew Curtis at $420,000 a year in rent in the late 1980s, in a deal that equated to about $1,130 a square metre.

Mark Foys was previously paying $132,000 a year for the building which had been bought by the Kennedy family in the late 1970s when the rent was $87,000.

Louis Kennedy, the man who brought glomesh handbags to Australia, died in 2008 aged 83.