Sydney’s Bakehouse Quarter sells for $300m
A local group has swooped on the Bakehouse Quarter in Sydney’s inner west in a deal rumoured to have topped $300 million in a sign the market for major residential sites in the city’s suburbs remains hot.
The listed BlackWall Property Trust, which has a 13% stake in the Kirela Development Unit Trust that owns the commercial and entertainment precinct, has disclosed the deal but provided no more details.
The Bakehouse Quarter was marketed last year and offers of $270 million to $300 million were received with Chinese-backed groups Aqualand and Ping An among those to assess the project.
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The site of the former Arnott’s biscuit factory was picked up by property identities Seph Glew and Paul Tresidder in 1997.
The pair formed the Kirela trust to hold and develop the property and, after several corporate changes over the past 17 years, transformed what was once 60,000sqm of empty factory buildings into a busy commercial and entertainment precinct.
The 6.39ha site in North Strathfield won strong interest due to its development potential. The town centre site spans over 17,400sqm of commercial, 18,700sqm of retail and entertainment space, with approval for a further 4900sqm, along with other potential development plays. National tenants included Aldi Supermarket, Arnott’s, NRMA, Fitness First, Gloria Jeans, Subway and AMF Bowling.
This agreement is highly conditional with formal documentation expected to take three to four weeks with a three-month due diligence period to follow
BlackWall had development proposals, incorporating residential and further retail space, as the precinct is positioned to benefit from the NSW government’s WestConnex project.
While BlackWall rejected offers on the property last year, it said that Kirela had now entered into a heads of agreement that could see the Bakehouse Quarter sold at a “substantial premium”.
“This agreement is highly conditional with formal documentation expected to take three to four weeks with a three-month due diligence period to follow,” BlackWall says.
Once this is complete, a series of call options will begin with the first and major call exercisable by the end of March 2017.
The BlackWall trust holds its interest based on a value for the Bakehouse Quarter of $270 million. But it revealed that if the first call option is exercised, the value of the trust’s interest would leap by 85 per cent.
However, BlackWall cautions that it has also received a preliminary draft opinion from an independent valuer, acting for lender NAB, that assesses the market value of the Bakehouse Quarter as low as $220 million.
BlackWall rejects this figure, especially in light of previous offers to buy the site, and maintains the value at $270 million.
