Circular Quay Pizzeria’s $20.5m Sale Under Expectations

A 151-square-metre commercial property along Circular Quay’s iconic harbourside tourist strip has sold for $20.5m, about $2.5 million less than the asking price.

But that selling price of the strata retail offering with Sydney Harbour and harbour bridge views still meant a rate of $135,761 per square metre.

That was short of the $153,358 per square metre paid in April last year for a cafe beneath the Bennelong building, less than 100m from this site.

A team of agents from Colliers and Plus Agency brokered the sale of the site at 61-69 Macquarie Street, which houses a pizzeria, bar and café on a long-term lease.

Colliers national director of Asian markets Joseph Lin said that while the property was advertised for $23 million, the purchaser and seller were happy with the result.

“This is a very strong sale,” Lin told The Urban Developer.

“This is a very well-known tourism destination, and this is a trophy asset,” he said.  “It is very rare that assets like this come to the market. This is still a very strong number.”

The seller is understood to be Sydney-based developer and investor Karl Kazal, although Lin would not be drawn on details of the buyer. There was strong interest from international investors.

▲ Circular Quay is the most expensive retail strip in Australia.

The property has a net income of $850,000 per year and includes outdoor dining areas of more than 150 square metres.

“If you look at the yield level of 4.15 per cent, I think it is a fair market and a very good result.”

Plus Agency executive partner Fiona Yang said Circular Quay was the most expensive retail strip in Australia.

“Investors face headwinds in terms of higher costs of capital and their natural reaction is to seek safety, which results in excellent prices for assets such as this premier Circular Quay retail space,” Yang said.

And, perhaps not surprisingly, the restaurant is topped by some of the country’s most expensive apartments. In June last year one buyer paid $2.72 million for a one-bedroom, one-bathroom apartment above the restaurant.