Why waterfront commercial properties are highly valued by tenants and buyers

From waterfront cafes and restaurants, to heritage buildings, a water view or harbourfront aspect is a rare mix in a commercial asset and is highly coveted amongst investors and tenants.

Scott O’Neill, director of commercial property buyers’ agency Rethink Investing, said waterfront commercial properties often generated emotional purchases.

“Which is rare in commercial property as it should be all about the numbers,” he said.

“As a result of the more emotional type purchase there are often more owner-occupier purchases vs pure investors.”

Waterfront properties typically outperformed and tended to attract more competition from buyers and tenants alike, PropTrack economist Anne Flaherty said.

“Many businesses are willing to pay a premium to occupy a property with a water view, understanding this is a draw for customers,” she said.

“For this reason, waterfront properties typically generate higher rents, as well as higher prices.”

A waterfront asset’s worth

Placing a value on a waterfront property was difficult, Mr O’Neill said, with many sold vacant, which meant a buyer needed to have an understanding of the business’ earning potentials before buying the property.

“Businesses would also need to weigh up the benefits of buying vs renting,” he said.

The high value investors placed on a waterfront asset was tied, once again to emotion, Mr O’Neill said.

“For example if an investor has been holidaying in an area for many years that may preferentially choose to invest in that area over others. Just so they can see their investment in person while they holiday with their family each year,” he said.

A crown jewel for an investor’s portfolio

At Circular Quay, The Rocks in New South Wales, Campbell’s Stores has hit the market for the first time since 1876.

Campbell’s Stores is on the market for the first time since the late 1800s. Picture: realcommercial.com.au/for-sale

The heritage-listed sandstone warehouse spans three levels and has recently undergone a $54 million refurbishment.

Stanton Hillier Parker selling agent Eugene Evgenikos said Campbell’s Stores was steeped in historical and cultural significance.

“It is the oldest sandstone warehouse in the southern hemisphere,” he said.

“Globally, this asset from a harbourfront perspective is without peer. Anyone that has been to Sydney has been either dined at, or passed by Campbell’s Stores.”

With an estimated net income per annum of $5.4 million, the fully-leased property was leased to tenants who had a track record over a 30-40 year period, Mr Evgenikos said.

There were only a handful of harbourfront assets which could be acquired, Mr Evgenikos said, with Campbell’s Store sure to be the ‘crown jewel’ of an investor’s portfolio.

“With Sydney being globally a gateway city and arguably [with] the most beautiful and adored harbour…Campbell’s Stores sits proudly on the world stage as a trophy asset,” he said.

“You can’t buy Sydney’s Harbour Bridge or the Opera House but you can buy Campbell’s Stores, which is nestled between these global icons.

“This for privates, can be deemed a generational asset that appeals to the emotions and is underpinned with strong investment fundamentals.

“For institutions and fund managers the same applies. The underlying investment fundamentals and exclusivity makes it very appealing.”

Campbell’s Store is being sold via an expression of interest campaign with offers closing June 22.

Some of Australia’s best waterfront buys

But it’s not the only waterfront commercial property on the market at the moment.

Here are some other standout waterfront properties currently on the market across the country.

The Equinox, Busselton, Western Australia

Described in its listing as a “rare opportunity”  to acquire one of WA’s most popular food and beverage venues in the heart of the Busselton foreshore, the venue comprises a cafe/restaurant, bar and alfresco area and a takeaway area.

The Equinox is an iconic venue in WA’s south west. Picture: realcommercial.com.au

Built in 2015, the property is nestled on Busselton’s main foreshore beachfront and captures views of the Busselton Jetty and across Geographe Bay.

It is being sold via an expression of interest campaign, with offers closing 22 June.

The Haven Beach Cafe, Terrigal, New South Wales

This popular cafe, restaurant and events business sits on crown land and the lease has been owned by the same operator for 24 years.

The lease for the the 1111 sqm premise is being sold for $600,000 [excluding GST]. When the lease expires, it can be renewed.

This business comprises three different revenue streams, an upstairs restaurant, a downstairs takeaway food outlet and an events and functions operation.

The lease for the Terrigal Cafe is for sale for the first time in more than 20 years. Picture: realcommercial.com.au/for-sale

The property has two separate commercial kitchens, indoor and outdoor seating plus a liquor licence for operations.

The Wharf Bar & Kitchen, St Helens, Tasmania

Set on the Tasmanian east coast, The Wharf Bar & Kitchen is being sold as a freehold/business on crown lease basis.

The prominent waterfront venue is being sold via an offers campaign. Picture: realcommercial.com.au/for-sale

The 323sqm venue offers views of the water from its dining areas, and comes with modern bar and kitchen facilities.

The business/freehold is being sold via an offers campaign.

Restaurant and bar, Maroochydore, Queensland

With a listing that describes the premises as having “arguably the best water views in Maroochydore,” this 172sqm property has hit the market for the first time in more than ten years.

This restaurant is fully-fitted for its new owners to walk in and begin business. Picture: realcommercial.com.au/for-sale

Ready for new restaurateurs, the fitted out property features a commercial kitchen, bar, freezer, cool room, toilets and comes with a liquor licence.

It is being auctioned on Thursday, June 30 and is available to purchase via vacant possession.