32 owners join forces to sell to developer

32 owners of 4 unit blocks in Sydney band mutually to make a multi-million turnover.

By taking advantage of Sydney’s property market, 32 owners have banded together to sell their assets for a multi-million dollar figure.

The 32 owners of a 32 one-bedroom beachfront apartment block, across four freestanding blocks in Cronulla, have likely made themselves a hefty $1.7 million each, from joining forces and selling their properties to a large developer, for a total of $54 million.

The one-bedroom apartments in the four, three-storey unit blocks at 49-51 and 55-57 Gerrale Street are dated and showing their age, however, with a site area of 2921 square metres and across from Sydney’s iconic Cronulla Beach, they present themselves as prime real estate for any large developer.

With Estate Agency JLL behind the negotiations, the exact price each owner would have received from the sale is unknown. However, each unit is a one-bedroom dwelling and can be estimated that all 32 owners would have gained at least $1.68 million. The agents who negotiated the 4-year deal said that the banding allowed some owners to sell their apartments for 2-3 times their current market value.

“The owners of the apartments were a diverse group and included investors, young professionals and the elderly. With a total sale price of $54 million, each owner will take home a significantly higher sale price for their apartment than if sold individually. Most owners achieved two to three times the current market value of their apartments,” JLL’s Dylan McEvoy said.

“The Cronulla property market has now revealed itself as quite mature and with a deep buyer base. We will see an increase in developers in the location as they look outside other markets with a potential saturation of activity.”

Just 75 per cent of owners are now required to decide to “collectively sell” thanks to the new strata legislation. Fair Trading Commissioner Rod Stowe said the legislation “brings strata legislation into the 21st century”. “The last major reform to strata was back in 1973, and parts of the legislation are no longer relevant in this day and age,” Mr Stowe said.

Mr John Thomas is the chairman of the apartments and has said it was a feat getting all 32 owners across two strata corporations to come to a mutual agreement “The release of Sutherland Shire’s LEP2015 brought about changes to zoning which added significant value to properties on Gerrale Street and presented an opportunity for all owners to effect a collective sale. There was the potential for a developer to carry out a major development for the area containing residential and commercial units,” Mr Thomas said.
“A number of leading developers responded to our call for ‘expressions of interest’. As you can imagine getting 32 owners across two properties who have varying opinions and priorities was a challenge, however with the implementation of the new strata reform laws and the help of JLL and the developer, we were able to pull together a compelling offer for all involved.”

There is potential for a nine-story development on the site, however, it is still unclear as to what the developer plans to do there.