This article is from the Australian Property Journal archive
APARTMENT blocks across Sydney are attracting growing attention from investors due to relatively high yield offerings and their flexibility.
CBRE says the asset class now receiving 20% more enquiry than office, development sites or retail investments. The agency estimates enquiries have risen by 48% over the past year, with 26,000 enquiries received, including 3,500 in the last month.
Nicolas Heaton, Gemma Isgro, Nick Wheatley, Toby Silk, Paul Grasso, Jason Lowry, Matthew Fenn and Aaron Arias are set to launch a marketing campaign for six apartment blocks within the next month, totalling 83 units with an estimated combined value over $50 million and an average yield of 4.5%.
They include larger blocks of 24 apartments at 111 & 113 Edgecliff Rd, Woollahra; 21 apartments at 21 Sutherland St in Cremorne; 19 apartments at 50 & 52 Warren Rd, Marrickville; as well as smaller blocks at 3 Mulwaree Rd, Randwick, 27-29 Macpherson St, Waverley, and 21 Cooper St in Paddington.
CBRE recently sold 20 Alexandra St in Glebe fir $5.25 million after receiving 660 enquiries, and in August 10 Henrietta St in Waverley sold for $20 million after 460 enquiries. Both traded on gross yields of 3.1%.
“Apartment block investments offer buyers a far greater yield than the return offered by banks or bonds, with far less risk,” Heaton said. “The icing on the cake is the ability to strata and sell down or totally redevelop in the future, driving higher returns over the life of the investment.”
Isgro said apartment block buyers are looking to purchase an investment vehicle with an initial return of around three to 4%.
“These investments also provide a land bank for future redevelopment, potentially seeing strong total returns of around 10%.”
Other recent deals include an eight unit block at 28 Barnsbury Gv in Dulwich Hill trading for $3.56 million, a high net worth Dover Heights family paying $5 million for a seven unit block in Rose Bay, and a North Bondi block of five units was picked up by a Hong Kong-based family for $5.75 million.
