Two strata corporations representing four freestanding unit blocks in Sydney’s Cronulla have sold their properties in one line. The blocks were purchased by experienced Sydney residential developers, for a total price of $54 million.
The deal was negotiated by JLL’s Dylan McEvoy, a Manager in JLL’s NSW Metropolitan Sales and Investments team.
Considered a gateway location, 49-51 & 55-57 Gerrale Street is situated opposite Cronulla Beach. The dated three-storey structures (highlighted in main picture) comprised 32 older, one-bedroom apartments. The site area of 2,921 square metres presented as a strong opportunity for redevelopment, and has potential for a 9-storey mixed-use development in the future.
JLL believes this sale represents one of the first group strata sales of this nature achieved in the NSW market, following changes to NSW Government Strata Laws which came into effect on 30 November 2016. Owners can collectively sell and redevelop their block if 75% of the lot owners agree and if certain requirements are met.
Mr McEvoy said, “The owners of the apartments were a diverse group and included investors, young professionals and the elderly. With a total sale price of $54 million, each owner will take home a significantly higher sale price for their apartment than if sold individually. Most owners achieved two to three times the current market value of their apartments.”
While all 32 owners were keen to sell in this group, they were motivated to come together by the recent changes to the Strata Laws. Mr McEvoy said he was already seeing an increase in vendors inquiring about how this process can unlock the values of their buildings.
Mr McEvoy said that Cronulla’s beach, public transport options and the diverse retail offerings made it an attractive location for the property development market and that interest was likely to increase. “The Cronulla property market has now revealed itself as quite mature and with a deep buyer base. We will see an increase in developers in the location as they look outside other markets with a potential saturation of activity.”
John Thomas, Chairman of the group of residents at 49-51 Gerrale Street said, “The release of Sutherland Shire’s LEP2015 brought about changes to zoning which added significant value to properties on Gerrale Street and presented an opportunity for all owners to effect a collective sale. There was the potential for a developer to carry out a major development for the area containing residential and commercial units.
“A number of leading developers responded to our call for ‘expressions of interest’. As you can imagine getting 32 owners across 2 properties who have varying opinions and priorities was a challenge, however with implementation of the new strata reform laws and the help of JLL and the developer, we were able to pull together a compelling offer for all involved,” Mr Thomas said.
Cronulla is located in Sydney’s Sutherland Shire, located approximately 26 kilometres from the CBD.