A new appetite for safe haven assets in and around Sydney’s CBD from Asian investors is driving the commercial property market, according to Savills.

The property advisor said offshore groups from Hong Kong, Malaysia and Singapore continue to hound sales agents for leads or pipeline appointments, with overwhelming interest from Asian investors for the minimal stock available.

Notable sales include 191 Thomas Street, Haymarket, and 398-402 Sussex Street, Haymarket – legendary Australian Architect Harry Seidler’s first commercial project.

The beam-free building is remarked as an impressive feat of engineering for 1954, with the eight-storey site was also given a glass frontage, shaded by rows of external operable louvres.

Iconic elements of the building were retained when the property was refurbished in 2019 to include basement retail, two retail tenancies, five levels of office space plus a rooftop terrace.

Savills joint state head for Asia markets Andy Hu said a purchaser, who was new to the market from Hong Kong, snapped up the Sussex Street property for $23.3 –  a 3.1 per cent net passing yield.

“Quality commercial assets continue to be at the forefront of investor attention, and we anticipate that prime and secondary yields diverge as a result of this,” he said.

Mr Hu said the sale was one of the lowest yields recorded for freehold assets in Haymarket, adding it was also one of the highest office rates per sqm.

“This is a quality offering and we had quite a few very high profile offshore family offices were bidding for this generational asset,” he said.

“There is planning control for B8 – Metropolitan Centre with a Floor Space Ratio – 7.5 :1 (Additional 1.5:1 can be granted STCA) and a Height Limit of 50 metres.

“This was a unique opportunity to acquire a generational and iconic asset located in the absolute core of Sydney’s renowned Haymarket.

The existing NLA of 1,097sq m* includes three super prime retail tenancies on ground and basement levels on a 177sq m site area with a street frontage of 14.94m.”

Savills joint state head for Asia markets Jordan Lee said the Sydney building had recently undergone an extensive refurbishment, with an estimated expenditure of $2m+, presenting in excellent condition.

“It also benefits from the bustling activities in the retail precinct with a number of local landmarks including Paddy’s Market, Darling Harbour, University of Technology, Darling Quarter Precinct and World Square,” he said.

“The Haymarket precinct is undergoing an extensive regeneration that will underpin its appeal as one of the most vibrant districts in Australia and will only be enhanced further with the completion of various developments.”