Merivale CEO Justin Hemmes has made another big purchase. Picture: Jonathan Ng
Pub baron Justin Hemmes has added another prime CBD site to his substantial CBD holdings after winning a gruelling commercial property auction with a $19 million offer.
The Merivale CEO – whose company runs Sydney venues such as The Ivy, Coogee Pavilion and The Establishment – was seen bidding at the auction for the property formerly known as The Barracks.
The freehold property at 5–7 Barrack St, about 150m from Wynyard Station, sold for $19,000,001. It is adjacent to a 16,300sqm site Merivale has proposed as a hospitality and mixed-use precinct.
The Barrack St site was once home to the Combined Services RSL and City Tattersalls Club.
5-7 Barrack St, Sydney has sold for $19m to Merivale.
The sale marks one of the most significant results for an asset of its kind in the current market, with the sale managed by Colliers’ James Cowan and Jack McGregor on behalf of Combined Services RSL sub-Branch.
The multi-level property, positioned in the heart of Sydney’s rapidly evolving western CBD precinct, comprises a 341.5sqm freehold site with a 1,229sqm building.
The site includes basement and ground floor hospitality space, with two levels of commercial accommodation above.
The asset was offered with vacant possession and the agents confirmed much of the interest was due to the potential to redevelop the site.
There were more than 100 inquiries within the first two weeks, including from investors, owner-occupiers, developers and high net worth private buyers.
The site had been used by NSW RSL.
Four qualified bidders attended the auction, with two parties competing aggressively in $500,000 increments. It is not known why the price was $19 million plus a dollar.
Bidding in person was Justin Hemmes. Merivale’s broader vision is for a city-shaping entertainment and hospitality hub within the surrounding block, according to Colliers.
Colliers head of NSW investment services James Cowan said going to auction had been a “high risk” strategy that ultimately paid off with a “high reward”.
“We’re experiencing headwinds and buyer resistance in every sales campaign, though have observed strong outcomes where there is a clear strategy,” he said.
The site is adjacent to another Merivale property. Picture: NewsWire / Gaye Gerard
Merivale operates major pub sites like The Coogee Pavilion.
Jack McGregor, Colliers executive of investment services said interest was “exceptional”.
“With major infrastructure investment, increasing pedestrian connectivity and significant neighbouring developments, the asset is extremely well positioned for activation and long-term growth,” he said.
“It will form an important part of what is becoming one of the most exciting entertainment and hospitality precincts in Sydney.”
Proceeds from the sale will go towards funding advocacy and compensation assistance, mental health and other support for veterans who have left service.
Combined RSL sub-branch president Bill Forsbey said: “We are a charity for veterans. That means our money goes to veterans, not into a rundown building. This sale puts $19 million to work for them.”