The stratum property of one of Sydney's most visible Pitt Street mall clubs, The Castlereagh Club, has been sold to fund manager Fife Capital for $20 million on a 6.5 per cent yield.
The Sydney-based asset manager, which has amassed a large portfolio of industrial and logistics assets in recent years, is understood to have purchased the 2622sq m property located at 197-199 Castlereagh Street.
Fife is also behind the $450 million 23,000sq m mixed-use development called York & George in Sydney's CBD after it amalgamated four properties a decade ago.
Its latest acquisition, The Castlereagh Club—which was listed for the first time in 23 years, sits within the five-level podium of the Victoria Tower Residential.
The sale includes a leaseback to the Castlereagh Club, which will continue to operate its club services, a bar and and Lynn Shanghai restaurant.
The club retains control of the 18 gaming machines on the ground floor and the Level 1 Bar adjacent to the restaurant. An onsite gym, World Gym, will also stay on the premises on a license.
The property has just completed a full refurbishment repositioning and rebranding the club as well as securing Wold Gym which will occupy 1,600 square metres.
It comprises squash courts, two levels of basement dedicated to a gymnasium, ground floor bar and poker machines and a restaurant and 12 car parking spaces on level one.
The property was developed by Leda Holdings in 1995 after purchasing the air space above the former Catholic Club and developing new premises for the Castlereagh Club which has occupied the building since completion.
The sale was brokered by Colliers International Tom O’Neill and Vince Kernahan in conjunction with Henderson and Horning’s William Mulvihill and Bill Rees.
“The campaign saw very strong interest from local and offshore high net worth investors and funds who recognise the exceptional growth prospects for the property being surrounded by new projects which are adding valuable amenity,” Colliers investment services manager Tom O’Neill said.
“These include the proposed Sydney Metro Stations and the towers that will sit above them -the Pitt Street North office tower and the Pitt St South “build to rent” tower.”
The sale is part of a series of facelifts and revivals for older clubs in the area including the $200 million proposed redevelopment of the City Tattersalls Club at 194-200 Pitt Street.