The private Longhurst group has made its first foray into Sydney's property sector with the $138.75 million acquisition of the landmark Edgecliff Centre in the affluent eastern suburbs.
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Longhurst is run by a former Mirvac executive Paolo Razza and emerged the victor over 18 other bidders, ranging from super funds to high net-worth individuals. The property was sold by a private Hong Kong-based company.
Mr Razza said the group saw the Edgecliff Centre as one with "repositioning opportunities" as part of the rebirth of the local area, which extends to the Double Bay retail zone.
"There is definite value in repositioning this asset in the future and that has been backed by the local council which is keen to reinvigotate the area," Mr Razza said.
The winning bid was led by another former Mirvac executive, Paul Apostoles, who together with Longhurst chief executive Mr Razza, has been involved in some of Sydney's more complex projects, including Green Square Town Centre, Harold Park and the newly opened Tramsheds.
Longhurst, backed by local investors, is focused on complex, mixed-use sites on the eastern seaboard.
"We have been strategic with our first purchase and waited for the right site to come along and we will do that again," Mr Razza said.
"This asset is typical of what we are looking for. It is complicated and will require patience and persistence but over time we will be able to add significant value to it."
JLL directors James Aroney, Simon Rooney and Steven Tsang negotiated the sale, which delivered an initial 3.72 per cent yield. Knight Frank were the co-agent.
The Edgecliff Centre, developed in 1971, was identified by Woollahra Council as an opportunity site, noting that redevelopment would deliver a range of community benefits including an improved retail experience with better connections to public transport.
Mr Razza said an important part of any future plans will be to explore ways to integrate the adjacent East Point shopping centre, which was originally developed by Mirvac in the early 1980s and is still owned by the family of Mirvac co-founder Henry Pollack.
"Development sites as good as this are all but non-existent in the eastern suburbs of Sydney and we have a once-in-a-lifetime opportunity to deliver something truly remarkable that benefits the whole community." he said.
The Edgecliff Centre currently offers 10,845 sqm of floor space comprising a neighbourhood shopping centre anchored by Aldi and a six-storey office building.
Mr Aroney said investors were attracted to the significant value-add potential, such as conversion to residential.
