The Inner-City Appeal of Sydney's Surry Hills
With the increasingly competitive residential development sector putting pressure on developers to innovate and create value for apartment buyers, the suburb of Surry Hills is attracting resourceful developers and a cult investor base of repeat apartment buyers looking to bank on the uplift in capital values and gentrification of the area.
Hutch and Hutch by Bridgelane, a project of 18 brand new boutique apartments designed by architect SJB, launched on 1st October 2016, sold 15 apartments on its launch day with an aggregate value of $25 million. The total completed value for the project is $33 million.
“Buyers are looking to take advantage of the low interest rate environment, we had in excess 2500 enquiries for Hutch and Hutch and 300 people through the display in the week leading upto and including the launch weekend” says Tim Rees, Senior Director of CBRE Residential Projects.
“It’s in the old rag trade areas of Surry Hills where we’re seeing quite a few developers vying for the off-market, heritage buildings to readapt to residential warehouse conversions, or create entirely new residential apartment buildings from a design that leverages off the heritage of the area,” says Caroline Fagerlund, Director of CBRE Residential Projects.
“Surry Hills is an interesting combination of grit, polish and vibrancy,” says Fagerlund. “It’s an area where visionaries like Michael Grant of Cornerstone Property Group have established a presence with multiple residential and commercial projects such as Holt on Heart, Cleveland and Co, 1 Lacey Street and the redevelopment of the iconic Griffiths Teas Building. “
Cleveland and Co, sold out off the plan in a few hours, two years ago at $12,500 per sqm. All 39 units settled in August this year and resales are occurring at $16,500 per sqm.
1 Lacey Street, developed by Cornerstone, designed by Alex Popov, also sold out on its launch weekend, averaging a rate of $17,000 sqm and a total completed value of $61 million.
According to Fagerlund, some of CBRE’s buyers have purchased multiple apartments off the plan in Surry Hills because of the gentrification and capital growth prospects.
Douglas Lai is one such buyer. “I have six properties, all one bedroom apartments, in the Surry Hills postcode,” he says.
The Done family siblings Oscar and Camilla, children of Judy and Australia’s iconic artist Ken Done, are set to launch their first development with CBRE, The Surry is a boutique building of 24 architecturally designed apartments located at 432 Elizabeth Street, which will have a completed value of $38 million. Candalepas Associates is the lead architectural firm on the project.
“The project will launch in early 2017 and we have buyers already enquiring on the project just because of the profile of the Done family as an iconic creative family, the team they have built around them to deliver the project is exceptional.”
Cornerstones’ BKH designed, $71 million redevelopment of the heritage Griffiths Teas building at 46-52 Wentworth Avenue, had over 5,000 enquiries before the launch weekend and sold out off the plan at $22,500 per sqm on launch day in August 2015.
“It is also a portion of what’s to come in terms of the increasing cosmopolitanism of the area. Renowned restaurateur Chris Lucas has a number of upmarket eateries in Melbourne such as Chin Chin – this flagship establishment will go into the ground floor at Griffiths Teas building. Sydney interiors architect George Illanis who refurbished the Dolphin, the Apollo and Cho Cho San is doing the interiors at Chin Chin, so it’s a project that is going to attract a lot of attention,” says Fagerlund.
“Surry Hills from our perspective has demonstrated a great scope for the future development of both residential and commercial buildings,” Cornerstone’s Michael Grant commented.
When it comes to value, according to Fagerlund, the diversity of residential styles in Surry Hills makes it a project by project study so it’s difficult to compare like with like when considering these warehouse conversions with brand new build.
“Warehouse conversions are less efficient. You are working with the bones of the existing building, so apartments are often oversized, meaning the end purchase price will stay comparable for any 1 or 2 bedroom apartment in the area, but the rate per sqm might be lower than a brand new build.”
“The success of Hutch and Hutch this past weekend shows the demand is also there for brand new developments as well as the warehouse conversions. Surry Hills has just got so much to offer”.
~Originally published in the MP Report