Investors dig deep for older style apartment complexes

The Waverley asset (marked), traded on a 3.7 per cent yield.

Buoyed by a rental shortage and rising replacement costs caused by, amongst other things, inflation and a tradie shortage, investors outlaid a bullish $12 million on two medium density residential assets.

In the biggest deal, four older style apartments and two brand new townhouses at 313 Bronte Road, Waverley, collected $9.25m.

Danny Caretti bought the Waverley flats in stages after moving in 40 years ago.

Vendor, Danny Caretti, acquired the four flats in stages until 2003 from Ena Harper, his landlord when he moved into one as a tenant in the 1980s.

One of the two new Waverley townhouses just rented for $1200 a week.

He also built the townhouses, one (5/313 Bronte Rd) which has just rented for $1200 a week.

Six offers came in for the investment following an expressions of interest campaign closing on April 16.

It traded three days later – the result reflecting a c3.7 per cent market yield.

On 699 square metres, zoned R3 Medium Density Residential, the asset is seven kilometres east of Sydney’s CBD.

“The property offered a compelling investment opportunity with an estimated total income of more than $340,000 per year…and future development potential with approval in place for a storage room at the rear,” Knight Frank’s Demi Carigliano, who represented Mr Caretti with James Masselos and Sotheby’s International’s Clint Ballard, said.

“It’s not often a property like this comes to the market in a sought after location such as Waverley….and this one hadn’t been officially offered since 1958,” he added.

Penshurst block trades prior to auction

Meanwhile at Penshurst, 17km south west of Sydney, a block of four two bedroom, double storey units completed in 1973 at 40 Victoria Rd traded for $2.55m – a low 3.5pc gross yield (story continues below).

The older style Penshurst block sold for a low yield prior to auction.

Each of the dwellings has a lock up garage.

The Victoria Avenue complex with four two storey dwellings.

On 694 sqm zoned High Density Residential, the property was marketed for its development upside.

Three groups contested seeing a sale ahead of a scheduled May 28 auction.

The asset previously traded for $1.225m in September, 2007 – the month of a Global Financial Crisis led downturn.

The Coenig family, the seller, was represented by Knight Frank’s Adam Droubi.

Rental crisis, building value

The rental crisis and high replacement costs drove demand for the Waverley and Penshurst assets, Knight Frank’s Anthony Pirrottina said.

“Many vendors are taking their unit blocks to the market to capitalise on the current strong demand,” he added.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of