10 Egan Street has sold UKO Newtown Village, a landmark co-living property in Sydney’s inner west, for $10.42m following very strong buyer demand for the asset during the sales campaign.
UKO Newtown Village, which is widely regarded as Sydney’s leading co-living asset, attracted immense interest during the sales campaign from both domestic and international buyers. The asset – at 10-12 Egan Street in Newtown – consists of 19 modern, self-contained studios operated by co-living operator UKO.
It was purchased by an offshore investor following an Expressions of Interest campaign run by James Masselos and Adam Droubi of Knight Frank on behalf of 10 Egan Street.
It was the first time the property was offered to the market in its current co-living configuration, following its conversion in 2019 from its former use as the Sydney Confectionary Warehouse.
The conversion saw a full reconstruction of the property from a warehouse to a highly efficient and contemporary living and working environment, with the building maintaining its character and history.
“UKO Newtown’s heritage also appealed to buyers, with the property maintaining its character following its conversion to a co-living asset. Its tenant covenant and secure cash flow was also a strong drawcard, with UKO being a reputable co-living brand known for its strong community engagement and high resident satisfaction. We expect co-living assets to maintain their desirability in the current market with tenant demand and returns to remain solid.”
Adam Droubi, Associate Director, Knight Frank
UKO Newtown Village, which consists of a 474.7 sqm building on a 382.9 sqm site, is 100% leased to UKO with a strong gross income of $632,333 per year. The sale of the property achieved a rate of $548,684 per key and a net yield of circa 4.15% on the existing UKO management agreement.
The studios in UKO Newtown Village have private en-suites and kitchenettes, while 40% also have courtyards. The building also has a communal lounge and games room, dedicated co-working space, on-site laundry facilities, 24/7 security surveillance, and an outdoor BBQ area.
“The sale was an extremely strong result. We anticipated significant buyer interest but the level of enquiry during the campaign exceeded our expectations. Despite evident headwinds in the broader economy, the co-living sector is continuing to experience strong levels of demand from local and offshore purchasers looking to capitalise on the high demand for the product.
“Like the rest of Australia, Sydney has a shortage of homes relative to demand, and there is strong enant demand for co-living units, with affordability being a key driver. Offerings such as UKO Newtown Village, in a densely populated urban area with access to existing amenity, transport links and employment, are particularly sought after.
“This property has exceptional connectivity, being just a short walk from the Newtown train station and major bus links, and is just 80 metres from King Street, Newtown’s vibrant dining, retail and cultural hub.”
James Masselos, Associate Director – Capital Markets Australia, Knight Frank
