A Sydney inner city portfolio with a potential fully leased income of about $10 million is set to hit the market through Savills Australia.

Tom Tuxworth, David Hickey, Jordan Lee and Nick Lower have been appointed to market:

• 55-59 Regent Street, Chippendale, a 4,100sqm Net Lettable Area (NLA) office on a 2.34 year Weighted Average Lease Expiry (WALE)
• 8-14 Broadway, Chippendale, a 321sqm NLA retail space with 32 hotel rooms across four levels above at The Posh Hotel, with a WALE of 4.25 years
• 114 Darlinghurst Road, Darlinghurst, which offers 191sqm NLA ground floor retail and 16 rooms above at the Sydney Boutique Hotel (total NLA 535sqm) and a WALE of 4.85 years
• 137-145 Broadway, Ultimo, a 548 sqm NLA retail space on a 2.81 year WALE with 2 levels of accommodation above.

According to Mr Tuxworth, who is Savills Australia’s State Director - NSW, Metropolitan & Regional Sales, the properties offer a strong diversified income stream.

“The portfolio lends itself to the opportunity to add value through repositioning, redevelopment and/or re-leasing as expiries arise capitalising on leasing demand strong market conditions," he said.

At a glance:

• Four commercial assets spread across the Sydney inner city suburbs of Ultimo, Chippendale, Darlinghurst and Broadway are set to hit the market.
• The portfolio is offered for sale in one line, any combination, or individually and is being marketed exclusively through Tom Tuxworth, David Hickey, Jordan Lee and Nick Lower.
• The assets have a potential fully leased income of about $10 million.

55-59 Regent Street, Chippendale. Source: Savills Australia.

The Sydney market has been typified by rising rents and historically low vacancy rates, meaning commercial net yields have compressed to sub 4 per cent over the past 12 months.

Mr Hickey said the level of urbanisation and revitalisation these suburbs have experienced over the past five years has not been experienced by any other area nationally.

“Three out of the four assets are located on the doorstep of Fraser’s Central Park which has single-handedly activated the surrounding retail precinct," he said.

"The Central Park renewal development has created a gentrified population base who are attracted to the area due to the transport connectivity, amenity, prominent cultural attractions and notably the well-known and super prime restaurant and bar scene along Spice Alley Chippendale” 

Mr Hickey said a boom in infrastructure spending by the state government over the past few years has increased the connectivity of the area, not only to the Sydney CBD, but also to suburban Sydney, promoting the viability of the area to small business operators in attracting talent to work in their operations.

“These suburbs already benefitted from excellent public transport links and infrastructure, which have been further enhanced by current rail and road projects currently underway," he said.

Throughout the past five years, Ultimo, Chippendale and Darlinghurst have experienced population growth (15.6 per cent, 35.9 per cent and 12.5 per cent respectively) above that of Greater Sydney (9.8 per cent).

Mr Lee, Savills Australia’s Joint State Head, Asia Markets, said Ultimo, Chippendale and Darlinghurst had long benefitted from a vibrant youth culture owing to the close proximity to tertiary educational institutions as well as renowned private secondary schools.

“Over the past year, we have seen a surge in the number of foreign student enrolments in Australian universities, private colleges, English language course and schools, with over 550,000 foreign students recorded to enrol over the past 12 months, an increase of 12 per cent over the previous year," he said.

The portfolio is offered for sale in one line, any combination, or individually and is being marketed exclusively through Tom Tuxworth, David Hickey, Jordan Lee and Nick Lower of Savills Australia, via International Expressions of Interest closing at 2pm (AEST) Thursday, 11th July 2019.

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