The Kings Cross Centre located beneath Sydney’s iconic Coca-Cola sign has been sold to an offshore investor for $23.81 million.
CBRE and City Commercial, on behalf of the Challenger Premier Hybrid Property Fund, negotiated the sale of the prominent convenience centre, which reflects an initial yield in the high 7% range.
The marketing campaign, executed through CBRE’s Steve Lerche and Sashi Makkapati in tandem with City Commercial’s Warren Duncan and Miron Solomons, is said to have generated considerable interest from local and overseas buyers, showing strong demand for well-located retail properties.
“The level of interest confirms that there is still strong demand for well-located retail investment property,” said CBRE’s National Director for Retail Investments, Steve Lerche.
“It also highlights that Sydney CBD and fringe property remains an attractive proposition for overseas investors, who were attracted to the King Cross Centre by both its recognisable location and its strong performing anchor tenants.”
Warren Duncan, City Commercial’s Managing Director, said “The centre is situated in one of the most densely populated areas in Australia, and is adjacent to Kings Cross train station which services around 22,000 commuters a day.”
“This is an exceptionally rare opportunity for a significant shopping centre investment of this size to be offered to the market in a city fringe location within walking distance to Sydney CBD.
“The area has undergone major gentrification and, with the revitalisation of William Street, and the establishment of fashionable apartment buildings, hip hotels and trendy bars, restaurants and cafes, the area’s demographic has evolved to service a growing number of affluent professionals who have significantly altered the character of the suburb.”
The Kings Cross Centre is located at the junction of Bayswater, Kings Cross and Darlinghurst Roads. It’s highly profile location below Sydney’s iconic Coca-Cola sign is said to have been a key attraction for prospective purchasers.
The strong tenancy profile was also a draw card, with Coles securing a long-term lease expiring in 2022.
The three-level property is made up of 24 specialty shops, including Flight Centre, Guzman Y Gomez, Subway, Pie Face, USA Nails, Burgerlicious and Gloria Jeans. The total gross lettable area of the centre is approximately 4,429sqm.
The remaining retail outlets are leased to a mix of local and national specialty retailers. The centre’s long trading hours will cater to the ever-growing local population, which is estimated at 30,000 people.
“The Kings Cross Centre fills a genuine niche and reflects the dynamics of the residents, office workers and visitors who frequent the area, catering to everyone from tourists seeking convenient food, trendy restaurants and bars, and quality retail outlets, through to locals who want to be able to buy all their groceries, gourmet needs and dine at street cafes without leaving the area,” Mr Lerche said.
The Kings Cross Centre was sold at a rate per square metre of $5,375 and follows Australand’s recent sale of the Crest Hotel to local private investors.
It completes the strata breakup of the Kingsgate centre by the Challenger fund, which last year sold the Fitness First component of the property for $9.15 million, representing a rate per square metre of $3,599.