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Knight Frank agent Anthony Pirrottina says a lack of confidence in the market for off-the-plan apartments is prompting developers to look to alternative residential developments.
A warehouse in Sydney's inner west that was once part of the Cyclops toy factory has sold for $38 million following a sales campaign that fetched more than 250 enquiries from potential buyers.
The 6,931sqm property at 40-76 William Street in Leichhardt was purchased by a private developer who intends to to landbank the asset over the next three to five years while submitting an application for redevelopment.
Sold by the Lewy family after three decades of ownerhsip, the building currently houses a 10,060sqm four-level commercial building that is rented as a self-storage facility.
Knight Frank agents Demi Carigliano, Scott Timbrell and Anthony Pirrottina marketed the property via an international expressions of interest (EOI) campaign that resulted in 45 inspections, 15 EOI round one offers and 10 EOI round two offers.
"Interest came from owner-occupiers, investors and developers, both locally and from offshore," says Carigliano.
"The property was sought after due to a variety of factors, but particularly due to the potential upside of the site.
"While it could remain as an investment, the property could also be repositioned or potentially redeveloped, subject to council approval."
Carigliano says the buyer plans to retain the existing warehouse shell and preserve its historic value, but convert the building into a residential site with loft style warehouse apartments.
"The Leichhardt property has a history, having once been part of the Cyclops toy factory, and being the last existing part of that warehouse, but there are no heritage restrictions to restrict development," she says.
Timbrell says the 40-76 William Street site was one of the last remaining commercial properties of scale in a renowned inner west location.
"This is the first time this remaining part of the toy factory has come to the market, with interested buyers waiting 30 years for the opportunity to purchase such a large and significant site," says Timbrell.
"The Leichhardt property is one of the largest commercial buildings in Sydney's inner west, and is in a prominent position with three-street frontage, including 88 metres along William Street.
"It also benefits from being close to amenity and transport, including the Leichhardt light rail station, the WestConnex and Sydney Metro projects, so a future residential development would likely be very successful, with strong demand from end users."
Pirrottina says with the wider market lacking confidence in purchasing off-the-plan apartments, developers are looking for properties suitable for alternative style residential developments.
"This Leichhardt property provided the developer with a warehouse style apartment play which provides a difference when selling off the plan," he says.
"The overall market for development sites with holding income is still in great demand.
"We are seeing developers build their pipeline for the near future, hopeful that the housing market will continue to rebound and provide strong results for pre-sales."
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