Seaside investments are high on the list for developers as they link into the lifestyle of occupants who want the work and play balance without the need for too much travel.
A shift in work practices has led to more people working within their neighbourhood, which has created a competition for space between commercial and residential developments. With demand rising, both uses are proving profitable in prices and rental growth.
One of the latest sites to be offered, which are also the last two Torrens Titled homes, are at 15-16 Steyne Street, being the former home to the Royal Far West school, which has been providing support and services to local country kids for more than 80 years. They are being sold as vacant possession.
The cash raised, which could be up to $10 million, using sales of similar properties as a gauge, will help fund the construction of the new Centre for Child Health and Learning. The new integrated Royal Far West Health and Learning facility will reach up to 15,000 families with services and support to help rural children reach their full potential.
The new Centre for Child Health and Learning will be built on the site of the existing Elsie Hill Building in Wentworth Street, adjacent to RFW’s guest accommodation Drummond House. No building or reconstruction will be taking place on RFW’s waterfront land under this Stage One development.
Agents advising on the sale, Stuart Cox, Neil Cooke and Tim Grosmann??? of Savills , said the flexible B2 Local Centre zoning means there is development potential for 963.5 square metres of gross floor area, subject to council approval, and a height limit of 10 metres.
Mr Cox, director of residential site sales for Savills, said well located projects in close proximity to shopping locations, public transport nodes, and “especially the beaches, demand the highest prices per square metre”.
He added that there has ben a rise in demand for beachside properties by self-managed super fund direct investments (SMSF); significant inflow of overseas investors and an underlying housing shortage coupled with an anticipated population growth.
According to Neil Cooke, director of residential site sales at Savills, the demand for housing in Manly has seen many international and domestic developers purchasing assets to keep pace with demand and rising unit prices. This has been as high as 17 per cent per annum compounded.
The same is said for commercial sites, with areas such as Brookvale, Warriewood and Frenchs Forest commanding higher returns.
The limited stock, rising demand and expected population growth has resulted in higher capital values and investment yields for commercial property on Sydney’s northern beaches, a report by Ray White Commercial has found.
Nic George, of Ray White Commercial NSW, said low interest rates and limited industrial land availability has helped boost land values and resulted in a new level of investment yield achievable, particularly in the sub $1.5 million price point.
Ray White Commercial head of research, Vanessa Rader, said industrial capital values across the northern beaches over the last 12 months have shown some variance depending on location, age and quality.
Ms Rader said the most affordable regions are Brookvale and Frenchs Forest, with Brookvale yields ranging from $1500 to $3800 per sq m with the upper range more representative of showroom industrial properties.
“Frenchs Forest is home to a large volume of strata industrial premises; these more uniform properties may include some office component and sit within a more restricted value range of $1700 to $2900 per sq m,” Ms Rader said.
“The Warriewood region also includes greater showroom type premises which have resulted in a similarly broad range as Brookvale, with an average of $3377 per sq m.”