This article is from the Australian Property Journal archive
UNIT blocks have racked up $33.6 million across five sales over the last two months, as investors continue to be drawn in by the asset class amidst the housing crisis.
Two blocks of units have brought the total sales up to this figure with a near-new block of 10 apartments at 1 Sparkes Lane, Camperdown transacting for $7.4 million and a four-level block of 16 strata titled apartments at 5-7 Windsor Road, Merrylands selling in one line for $7.5 million.
1 Sparkes Lane was purchased by a private high net worth buyer from Belcorp, with a short settlement in place, following an expressions of interest campaign by Demi Carigliano, Anthony Pirrottina and Adam Droubi from Knight Frank.
Throughout the campaign, more than 134 enquiries were received and 24 inspections took place.
“We had interest from both local and offshore capital, resulting in six offers and the property being sold within 24 hours of the EOI campaign closing,” said Carigliano.
“The property is fully leased, but also offers opportunity for significant rental uplift over the coming months to increase the return, which was attractive to buyers.”
The fully-leased property is made up of a mix of one- and two-bedroom apartments with balconies and onsite parking and has an expected potential gross rental income of more than $392,000, or $20,000 more than the current income.
“The asset’s location in a prime inner Sydney location, short walk to Sydney University and Royal Prince Alfred Hospital, was also a drawcard for investors,” added Carigliano.
Meanwhile, 5-7 Windsor Road comprises 16 strata-titled apartments on a 1,277sqm site with on-grade parking.
Adam Droubi and Jessen O’Sullivan from Knight Frank, alongside ay Fayad gtom Laing & Simmons, managed the sale via an expressions of interest campaign, fielding 45 enquiries and three offers.
Currently, the property boasts a passing income of $457,000 and a potential rental income of more than $484,000.
“Situated at the heart of Central Western Sydney, surrounded by rich local amenity, this asset presented a compelling and secure investment opportunity,” said Droubi.
“It is adjacent to major employment centres in the midst of Metropolitan Sydney’s infrastructure boom, attracting high quality tenants, and has a secure stable cash flow with significant rental upside, appealing to landlords.”
The transactions follow the recent sales of 88 Francis Street, Bondi Beach for $6.9 million; 313 Bronte Road, Waverley for $9.25 million; and 40 Victoria Street, Penshurst for $2.55 million.
“There is strong income on offer for unit blocks, with many of these recently-sold properties having the potential for rental uplift to bring them up to the market. The replacement value of these properties also continues to rise due to inflation and increasing construction costs,” said Pirrottina.
“We anticipate purchaser demand for apartment blocks will remain strong, with investors actively seeking apartment blocks from throughout metropolitan Sydney, capitalising on strong rental growth and providing capital protection against inflation.”
Australia’s apartment market has been facing a major shortage, as more buyers look to invest in units, renters are set to bear the burden with a 28% rise in rents between now and 2028.
