The Sydney-based company, led by James Markham, bought the 7,700 sqm waterfront site on a 6.02 percent yield from real estate investment firm LaSalle Investment Management.

The global group purchased the leasehold for about $90 million in 2016.

The area is made up of Precinct 1, which comprises of two strata, and Precinct 3 with one retail stratum, together providing more than 5,600 sqm of retail accommodation.

The fully leased site has a weighted average lease expiry (WALE) of 10.3 years by area and is leased by 14 restaurant and bar tenants - including Cargo Bar, Bungalow, The Loft and Meat District Co - until at least 2029.

JLL’s Australasia Head of Retail Investments Simon Rooney, who sold the asset, said retail assets in the CBDs continue to be the focus for investors.

“(These properties) will benefit from growing tourism spending, employment growth and rising inner-city high-density residential space. CBD retail assets therefore offer strong income growth potential relative to other retail assets,” he said.

Mr Rooney added that retail and food-and-beverage in central Sydney was benefiting from significant property development.

“The Sydney CBD is undergoing major changes in terms of new commercial and residential construction, upgraded transport infrastructure and new hotels and tourism-related development, all of which will drive retail and food-and-beverage spending over the long term.

“The transaction provides Markham with exposure to King Street Wharf, which is perfectly positioned to capitalise on the development and growth in the Sydney CBD that will drive income growth for the asset.”

Co-agent Stonebridge Director, Carl Molony, who brokered the deal along with Philip Gartland, said, LaSalle has upgraded the “offering and income profile to reflect its premium location within the Darling Harbour precinct” since acquiring the asset two years ago.

“With the benefit of high historical tenant retention and a WALE in excess of 10 years, coupled with exceptional in-built rental growth, the asset strikes a rare balance of income security, growth and value-add potential,” Mr Molony said.

The sale brings the total of Sydney CBD retail property deals in the past 12 months to nearly $1 billion, according to JLL.

One recent transaction includes the historic Soul Pattinson Building at 160 Pitt Street, which sold for $95 million to Kingvest in August 2018.

And half stakes of Sydney icons the Queen Victoria Building, The Strand Arcade and The Galeries - now owned by Vicinity Centres - changed hands in November 2017.

Cover Image: Accor Hotels