Feros Hotel Group buys iconic Highfield Caringbah for circa $15M

FEROS Hotel Group has snapped up the iconic Highfield Caringbah at 32 Banksia Road in Sydney’s south for circa $15M following a successful expressions of interest campaign.

The asset had a 3,072sq m* building area and 1,024sq m* land area, was on the northern side of the Kingsway and had street frontage to Mackay Street, Banksia Road and Hay Lane.

The property was marketed and sold by Ray White Commercial NSW – Sydney City Fringe Principals Kristian Morris and Justin Rose.

Mr Morris said there was strong interest throughout the campaign and the final sale price represented a sub-four per cent yield.

“This was a well-executed campaign with 85 direct enquiries, 15 different groups inspecting the property and multiple parties interested close to the four per cent yield mark,” he said.

“Buyers saw the value in such a long lease (15-years plus options totalling up to 60 years with ratchet clause in favour of the lessor) and strong covenant.

“Hotel assets that are subject to such a long lease don’t come up very often and this resulted in such a tight cap rate.

“The property offered a double net lease with net passing income of $589,104 + GST, and has future development potential to add accommodation and additional rooftop bar, STCA.”

Mr Rose said the property was an outstanding three-storey mixed-use hospitality asset with four separate but interconnecting dining experiences.

“It’s rare to have such a long and secure lease to a group that’s committed to the area, and it provided the right buyer with an investment seldom offered to the market,” he said.

“These freehold subject-to-lease (FSTL) opportunities are rarely available and it offered a stress-free and hassle-free annuity income stream, with the tenant paying 100 per cent of the outgoings and running costs.

“It’s close to the Caringbah Town shopping centre and major retailers such as Coles, Woolworths, McDonald’s and is just 150* metres to Caringbah train station.”

*Approximately.