This article is from the Australian Property Journal archive
A LANE Cove site has sold for $25 million, joining a number of sites in exclusive Sydney suburbs set for high-end apartments aimed at owner occupiers.
Winim Funds Management bought 1 Gatacre Avenue and 5 Allison Avenue on Sydney’s lower north shore, with the amalgamated site formerly comprising of a 43-room hotel and licensed restaurant, and adjacent residential home.
It has high density residential zoning that allows for development of about 7,169 sqm of gross floor area.
JLL’s Harry Sullivan managed the deal.
According to JLL Research, the volume of all apartment sales in Sydney has increased significantly since the June quarter of 2020, while the of apartments under construction rose slightly in this year’s Q2 to 6,560, in an environment where it is generally smaller, high-quality projects progressing to construction as developers continue to focus on the owner occupier market.
Sullivan said there a trend of owner occupiers, particularly downsizers, taking advantage of the booming housing market in the Lower North Shore and capitalising on low interest rates and rapidly rising prices and pocketing the change in the process.
“Active developers are focusing on smaller-scale high-quality projects in premium locations. Improving conditions are seeing investors return to the apartment market, looking to capitalise on the strength of the broader housing market and rapidly growing prices.
“Like the existing housing market, more owner occupier focused smaller apartment developments across much of Sydney have rebounded and performed strongly over the past year.”
The luxury rightsizing market is heading for a shortage in supply, according to Knight Frank. Since 2015, new and established prime apartments in major cities have grown in price by 36% and 31% respectively, while the pipeline for new apartments across prime regions of the country is set to fall by more than 39% over the next three years.
Sullivan said demand is being driven by owner occupiers.
Others developers looking to take advantage of the trend include Top Spring Australia, which recently splurged $94 million on a Double Bay site to build boutique apartments, and Fridcorp and Piety Group, which bought the suburb’s famous Intercontinental Hotel as a conversion play for $178 million.
