The Grounds of Alexandria site changes owners as inner-city market fires
The Grounds of Alexandria in Sydney.
The home of high-profile restaurant The Grounds of Alexandria is changing hands for a whopping $186m in a sign that inner-city properties are still firing even as the commercial market slows.
The South Sydney complex is being sold by listed giant Dexus to one of the property funds of which it picked up the management last year when it bought AMP Capital’s local real estate and infrastructure unit.
The deal on the South Sydney property shows a hefty lift from the $110.2m that Dexus paid for the site in 2016 when it bought it from a unit of investment bank Goldman Sachs.
The Grounds of Alexandria opened in 2012 and has won fame as an inner-west eatery that is an all-in-one cafe, bar, restaurant, sustainable garden and event hub, drawing 15,000-20,000 visitors each week and a celebrity crowd.
The restaurant quickly won a name as one of the country’s most Instagrammable locations, and the brand expanded to include a Sydney CBD location in 2017.
The Grounds of Alexandria. Picture: Christian Gilles
The Grounds business, which includes a coffee roastery as well as popular catering and events businesses, will not be affected by the real estate sale.
The restaurant was set up by businessman Ramzey Choker and now former business partner, Jack Li Ming Hanna, who is no longer involved in the operation.
When Dexus bought the overall complex, known as The Mill, seven years ago, it had to fend off interest from the likes of JPMorgan Asset Management and City Freeholds.
Despite the focus on the restaurant, it was classed as an industrial holding as it serves as a business park that was valued at $202.5m last year. Dexus boosted the park’s value by winning AbCellera, which finds antibodies that can be developed into drugs that prevent disease, as a tenant.
The Mill complex, home of Grounds of Alexandria, has changed hands.
The Mill is its local headquarters, and the space has been fitted out into a state-of-the-art facility that can host more than 100 researchers. The precinct comprises a mix of nine modern and refurbished historic buildings, including converted warehouse style offices, life science laboratories and retail showrooms.
It also houses swimwear and women’s beachwear fashion brand Seafolly. The deal was quietly struck by the unlisted Dexus Wholesale Australian Property Fund, as part of a two-pronged property acquisition from its manager, in which it also picked up the Crossbank Estate in Brisbane for $88.47m. That estate is a 13ha industrial site located in the sought-after Trade Coast precinct of Hemmant in Brisbane’s eastern suburbs and sits close to Brisbane’s seaport terminals and the north-south arterial roads that connect South East Queensland.
Events are regularly held at The Grounds of Alexandria. Picture: Supplied
Visy has pre-committed to a new facility on the site, which is being built and expected to be completed later this year. A second facility will be built there, with talks for a precommitment to a national customer well advanced.
Dexus is contributing equity into the fund to back the acquisitions, cutting its gearing. After the deal, the fund’s allocation to office will fall from 32.3 per cent to 27.9 per cent, and the weighting to industrial will rise from 39 per cent to 45.8 per cent.
The deals boost the fund’s average occupancy rate and weighted average lease expiry term, which are expected to further increase following the completion of Crossbank Brisbane.
The fund owns 28 properties and is selling an office block in North Sydney, promoting the building at 124 Walker St as a $120m counter-cyclical play.
CI Australia is handling the office block and noted that the North Sydney CBD was rapidly evolving with new transport connections boosting the 18-level commercial tower.
