A local developer has paid $18 million for an amalgamated Neutral Bay site in Sydney, selling for more than $1 million above the price guide.
Located at 165-173 Military Road, the 762 sqm site comprised four fully leased, two-storey freehold properties on a prominent lower north shore location.
The sale price reflected a net passing yield of about 2.5%.
The purchaser intended to build a mixed-use development on the site, which had a 45m frontage, a B4 mixed-use zoning and a 16m height limit.
Tom Appleby and Henry Burke of Colliers sold the site in conjunction with Andrew Croll of Croll Real Estate, fielding 194 enquiries and 11 offers during the two-stage expressions of interest campaign.
“The sale really speaks volumes about how local strip retail property owners are increasingly investigating the viability of higher and better use throughout Sydney’s North Shore as vacancy rates continue to rise and effective rents continue to fall,” Appleby said.
“As demonstrated with both this transaction and our recent $51 million sale of 378-390 Pacific Highway in Crows Nest, a premium can generally be achieved through a collective sale if planning controls allow for uplift.”
Demand for quality products in prime locations such as the lower north shore residential market remained high, according to Colliers.
“Neutral Bay’s affluent demographic catchment area has traditionally been typified by restricted future new apartment stock,” Burke said.
“This limited supply, the easing of border restrictions and the government’s push to significantly enhance the nation’s skilled migrant intake are all set to drive property values to record highs in 2022.”