Sydney developer and hospitality group Iris Capital is considering a move into larger-scale residential developments, banking on strong demand from homebuyers in the capital city and regional centres.
The developer has also been buying retail and hospitality investment opportunities, swooping on the $20 million heritage building with retail tenancies next to the MLC Centre in the Sydney CBD.
The deal at 106 King St took observers by surprise as entrepreneur Duncan Hardie has long held the four-storey heritage building. But the pricing at $360,000 per square metre proved too tempting for the New Zealand-born businessman and Iris chief executive Sam Arnaout.
The building’s ground floor is leased to Le Creuset with three floors of office space above. It is benefiting from the rising demand for space in the up-market retail precinct.
The deal was negotiated by Hunter Valley real estate agent Alan Jurd who has had a 20-year business relationship with Mr. Hardie.
Iris also bought Sydney pub the Tiger Bar Hotel Hurstville and is considering options for the site, which currently includes a public bar, TAB, gaming room and upstairs restaurant. The deal was negotiated by JLL national director John Musca.
Iris is hoping to capitalise on demand in inner Sydney and regional NSW.
It has about 1600 apartments in its pipeline to be delivered over the next one to five years, with projects in inner suburbs Potts Point and Bondi Junction.
It is also developing a masterplanned community in the Hunter Valley.
The group has slowly been increasing its exposure to residential and mixed-use developments, a natural progression from its hospitality operations, and now plans to move to larger scale developments, Mr. Arnaout told The Australian.
“The intent now is to focus on delivering the pipeline before we start looking at new sites … (although) we will always consider sites that make sense for the group from time to time,” he said.
Mr. Arnaout said the heated Sydney market was a driver for home buyers to leave the capital and move north to the more affordable Newcastle, where it is developing the East End luxury apartment project.
“The employment drivers there are very good. There’s been a big boost in government infrastructure spending which has driven opportunities in education and health in the region,” he said.
The group is set to launch the masterplanned $60 million-plus Wyndham Ridge estate in the Hunter Valley next month.
Mr. Arnaout expects a mix of local buyers and commuters to Sydney and dismissed concerns about the region’s economy. “Just because coal prices have dropped doesn’t mean the industry shuts down,” he said.
Iris last year bought the Sweetwater estate in Rothbury from Mr. Hardie, who was the visionary behind the Huntlee new town project.
Mr. Hardie has been an active property trader recently. He and wife Lyn bought the penthouse in Darlinghurst’s Top of The Town apartment complex earlier this year. He has paid $10.9 million to former media executive Cameron O’Reilly.
SOURCE: The Australian Financial Review
POSTED: June 26, 2017
AUTHOR: Elizabeth Redman, Ben Wilmot
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