Reservoir on Crown collects premium for LaSalle
In a second major east coast deal this year, Shakespeare Group is understood to be paying $115 million for Surry Hills’ Reservoir on Crown.
The price for the three level office and retail building, best known for its ground floor tenant, The Winery, would reflect a 4.6 per cent net yield.
The asset was offered by LaSalle Investment Management which paid $71m on behalf of a fund in 2017.
That seller, Clipper Property Group, outlaid $50.25m three years earlier.
Developed in 1960, the investment was previously held by Mirvac, which refurbished it in 2009.
Development upside
At 285A Crown Street, Reservoir on Crown occupies a 3058 square metre site, considered one of the suburb’s biggest.
The last two public marketing campaigns spruiked the development upside, possibly with a 1500 sqm extension; the holding also fronts Campbell and Reservoir streets.
The Winery occupies about a fifth of the 4728 sqm of net lettable area while 10 office tenancies are leased to, amongst other groups, co-work outfit The Commons and Intercom Software.
There are also 15 car parks (story continues below).
The acquisition comes two months since Shakespeare, with sister group Prime Value Asset Management, both led by Melbourne’s Yak Yong Quek, spent $114m for Gold Coast’s Palazzo Versace.
Two years ago, in the early months of the pandemic, the investment house and developer picked up Flight Centre’s St Kilda Road headquarters – outlaying $62.15m.
Future proofed investment with upside: agents
Knight Frank’s Paul Roberts, Jonathan Vaughan, Tim Holtsbaum and Dominic Ong with JLL’s Mitch Noonan, Luke Billiau, Sophie Tieman and James Aroney marketed Reservoir on Crown.
“The building has recently been future proofed, having undergone a…capital expenditure program minimising future expenditure requirements,” Mr Roberts said upon listing, adding the Weighted Average Lease Expiry was six years.
“It offers value-add options for the buyer too, including the potential for further rental reversion or the opportunity to subdivide the existing winery and café from the main building to sell to an owner occupier or investor,” according to the executive.
Last May, LaSalle sold a Brisbane office for $214m – a major premium on the $142.15m it paid four years earlier, also the time it picked up Reservoir on Crown.
Subscribe to our newsletter at the bottom of this page.
