Darlinghurst cafe where film festival Tropfest was born snapped up before auction by expatriate

Darlinghurst’s Tropicana Caffe – better known for being the birthplace of the world’s largest independent film festival, Tropfest – has sold before auction for $6 million on a tight 4.2 per cent yield.

The property was on the market for only 10 days before it was snapped up by an Australian expatriate, unconditionally, two weeks before its scheduled auction.

The Victoria Road café site shot to fame in 1993 when actor John Polson approached then restaurant owner Sergio Tezzo with the idea to host 200 guests for an amateur short film evening in the café named Tropicana Short Film Festival.

The film festival has moved recently to Parramatta Park and its name has been shortened to ‘Tropfest’.

The selling agents were LJ Hooker Commercial’s Steven Kruyer and James Griffiths.

“The Caffe is known as the birthplace of the short film festival. But - in its own right - it’s been a staple of Darlinghurst’s dining scene for almost three decades,” Kruyer said.

He added that the buyer was drawn to the security the investment offered, especially with the recent purchase of the business by Tonci Farac, the former owner of Wildfire Restaurant in Circular Quay, who has taken a long-term lease on the building. Duncan Thompson, a long-term member of Bill Granger’s restaurant team, will be managing the restaurant.

“Tonci Farac, a well-known Sydney hospitality figure, has taken a 10-year lease with 2 x 10-year options on the Tropicana Caffe, so the purchaser recognised the safety of the investment.”

He said the tight yield was representative of the buyer demand in the city and fringe.

“There’s a lot of investors seeking sub $10 million assets, and when there’s a long-term lease in place, they’re prepared to pay a premium, as happened with the purchase of the Tropicana,” he said. 

“A sub five per cent yield is very strong in the hospitality industry and we’re expecting to see more interest at this level going forward.”