Tycoon Phil Wolanski’s Denwol swoops on Surry Hills office block for $32m

Denwol has bought 79 Commonwealth Street, Surry Hills

Tycoon Phil Wolanski has swooped on a boutique office building in Sydney’s Surry Hills, picking up the block in Commonwealth Street for $32.6m.

The purchase of the six-level property at 79 Commonwealth Street shows the returning appetite for well-located fringe assets, with the property veteran and philanthropist among the city’s most savvy investors.

Mr Wolanski has wide ranging interests. He was a director of Football Federation Australia, during the period in which billionaire Frank Lowy was chairman, and he travelled with the Socceroos as the head of delegation. He has also had a long association with the Sydney Opera House and served three terms as a trustee to the Opera House board. He also supported the National Institute of Dramatic Art.

Property records show the asset was bought by a company linked to his Denwol operation. It was sold by TI Commercial, which picked it up for $7.25m in 2011. Denwol’s interests span residential, commercial, retail, hotel and industrial investment and development. It is also undertaking a boutique apartment project in Double Bay and its projects include Bellevue Hill’s Splendour apartment complex and the Archibald at Bondi Junction.

The Surry Hills building comprises 2,221sq m of office and ground-floor retail space, dual frontages to Commonwealth and Hunt Street, 10 basement carparking spots and a top-floor balcony with mezzanine. It is on a 380sq m site and was sold around 85 per cent occupied, with a weighted average lease expiry of 1.8 years and net passive income of $1.6m. The sale was brokered by Knight Frank’s Jonathan Vaughan, Andrew Harford and Will Brassil and JLL’s James Aroney, Simon Storry and Harry Borger. They did not comment on the buyer.

Mr Harford said the Surry Hills property was a high-quality commercial asset in Sydney’s most tightly held fringe precinct, where only three office buildings had sold in the $20m to $50m price range over the past three years.

“We are seeing growing buyer demand for office assets in Sydney’s fringe as the market continues to recover, and Surry Hills is one of the most sought-after markets, given it is the tightest held office market in Australia,” he said.

Mr Aroney said the building delivered a compelling mix and it could be repositioned.

“This property offers a standout combination of character and flexibility in one of Sydney’s most competitive fringe office markets. With zoning that supports multiple uses and rents that remain below prevailing market levels, the asset provides clear opportunities to enhance income through targeted upgrades and tenant repositioning,” he said.

“It’s scale and configuration also create genuine optionality, whether that’s light refinements, broader reconfigurations or an eventual transition to an owner-occupied headquarters for a corporate looking to establish a flagship presence in a thriving urban village,” he said.