ACT Restaurants Selling Like Hotcakes


Real Estate Interstate Investors Buy into Capital’s Booming Food and Wine Scene.

Despite more than two turbulent years for the hospitality industry, Canberra restaurants and cafes are proving to be a hot commodity for investors. Four commercial hospitality sites, leased to prominent food and beverage operators, sold for a combined total of more than $8 million last month. The sites tenanted by 86 South restaurant and Bloom Coffee in Phillip sold last month for $2.75 million and $1.22 million respectively. Both are located in Doma Group’s Alexander and Albemarle precinct at 45 Furzer Street and have been operating for less than six months. In Campbell, the venue leased to Chairman Group’s Lanterne Rooms sold for $2.8 million, while Black Fire Restaurant in Braddon sold for $1,651,000.

Marketed for sale by commercial real estate firm Burgess Rawson, the four properties were slated for auction in March, however three sold prior. Each of the buyers were from outside the ACT, according to James Baker, sales and leasing associate at Burgess Rawson. He said the ACT’s stamp duty exemption on commercial properties under $1.6 million – which applied to one of the four sales – is an enticing offer for interstate buyers.

“Being under that stamp duty threshold is very attractive for interstate investors and [is a] benefit they don’t have ability to access purchasing property in their own states,’ he said. The current leases at each of the venues will continue under their new owners. Lanterne Rooms has a lease until 2032, while the lease for 86 South runs until 2029, both with options to extend. Bloom Coffee’s lease expires in 2028, while Black Fire have an agreement until 2026. Quality tenants with long leases, plus fixed annual rent increases are all appealing factors for buyers, Mr Baker said. “One of them goes up 3.5 per cent year on year and when you’ve got five years in the lease, that’s compounding. So it makes for a very attractive investment,’ Mr Baker said. “I think certainly right about now, there’s a lot more confidence coming back into the [hospitality] market … everyone’s just chomping at the bit to get out and about.’ Commercial property investors have also had their sights set on Canberra’s office market in the last 12 months, thanks in part to the ACT’s low vacancy rates.

Brittney Levinson, The Canberra Times