Sydney’s King Street Wharf reeled in for $125m
One of Sydney’s most famed public precincts has sold, with private real estate group Markham paying $125.5 million for the King Street Wharf.
Home to renowned venues and eateries including Cargo Bar, Bungalow 8 and Meat District Co, the wharf could now be set for revamp, with the buyer known for buying and then repositioning its assets in order to add value.
The sale wraps up a 10-month search for a new owner, after LaSalle Investment Management put the asset on the market in early February, with an initial expressions of interest campaign ending on March 22.
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The wharf, which lies directly between Darling Harbour and Barangaroo, has properties spanning 5651sqm of retail space and features 14 restaurants, all of which are tenanted.
The deal was completed on a yield of just over 6%, with most tenants on long-term leases.
Stonebridge’s Carl Molony, who facilitated the sale with JLL’s Simon Rooney, says the wharf continues to be one of the city’s premier lifestyle destinations.
“Since acquiring the premier waterfront restaurant and lifestyle asset, LaSalle has successfully transitioned the offering and income profile to reflect its premium location within the Darling Harbour precinct,” Molony says.
“With the benefit of high historical tenant retention and a WALE in excess of 10 years, coupled with exceptional in-built rental growth, the asset strikes a rare balance of income security, growth and value-add potential.”
The wharf is one of the most high profile sales in an already busy year for Sydney retail property.
In August the historic Soul Pattinson building on Pitt St sold for $95 million, while in April a 75% stake in the 383 George St building traded for $200 million.
Rooney says premium Sydney retail continue to be favoured by investors.
“Investors continue to target retail assets within CBD locations that will benefit from growing tourism spending, employment growth and rising inner-city high-density residential space. CBD retail assets therefore offer strong income growth potential relative to other retail assets.”
“The Sydney CBD is undergoing major changes in terms of new commercial and residential construction, upgraded transport infrastructure and new hotels and tourism-related development, all of which will drive retail and food and beverage spending over the long term.”