HERITAGE WAREHOUSES REBORN AS SYDNEY WORKSPACES UNDER THE HARBOUR BRIDGE
A cluster of century-old warehouses beneath the Harbour Bridge has been transformed into a modern workplace hub, now home to more than 100 businesses.
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Six historic warehouses beneath the Sydney Harbour Bridge have been given a new lease on life, re-emerging as Work inc., a co-working precinct housing over 100 businesses.
Built in the 1920s to support the construction of the Harbour Bridge, the Lavender Bay structures have served various roles over the decades, from housing highway patrol units to operating as car dealerships.
Founder Mark Davidson said the potential of the site became clear when he first encountered the abandoned Bay 10 warehouse.
“When I first stumbled upon the abandoned Bay 10 warehouse, it was leaky and forgotten, but I saw incredible potential,” Davidson said.
“We weren’t just building offices; we were building a community, creating a space where the grit of Sydney’s industrial heritage could inspire the next generation of innovators.”
The development retains much of the original industrial character, with soaring concrete walls and exposed steelwork now sitting alongside floating glass office pods, curated interiors and collaborative breakout zones.
Among the site’s quirks is Bay Ten Espresso, a café housed in a converted shipping container once seized during a major drug smuggling operation. It now serves as a coffee hub for both tenants and the wider Lavender Bay community.
Davidson said its inclusion underscored the broader theme of transformation.
“When we found this particular shipping container, its illicit past made it an even more compelling part of our story of reinvention. Now, it’s serving up a much-needed, perfectly legal kind of fix,” he said.
Work inc’s mix of preserved heritage and contemporary design has turned a piece of Sydney’s industrial history into a case study in adaptive reuse, while providing an unconventional workspace for the city’s growing business community.
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A legacy “partner” lease structure tied to sales, not fixed rent, is drawing investor attention as a potential hedge against inflation.
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A McDonald’s restaurant in Yass has been brought to market with one of the last remaining pure turnover leases in Australia, offering investors a direct share of revenue rather than a traditional fixed rental return.
The asset, located at 1713 Yass Valley Way, is being marketed by JLL via an expressions of interest campaign closing on 30 April. It is underpinned by a legacy lease structure no longer offered by McDonald’s in Australia.
Under the arrangement, the landlord receives 6.5 cents for every dollar spent at the restaurant, creating uncapped income growth linked directly to sales performance.
The lease is structured as triple net, meaning no operational risk, capital expenditure obligations or management responsibilities for the owner.
According to JLL, the property has recorded compounded annual sales growth of 4.26 per cent since 2003, with rental income rising by 150 per cent over the same period.
JLL’s David Mahood said the structure allows investors to “participate directly in the sales growth” of the business, rather than relying on fixed annual rent reviews.
The newly commenced lease runs to 2036, with four additional 10-year options extending to 2076, providing a weighted average lease expiry of 9.92 years by income.
The asset sits on a 3,571 square metre freehold site in Yass, with significant frontage to the Hume Highway, one of Australia’s busiest freight corridors.
The location benefits from high volumes of passing traffic, including an estimated 75,000 vehicles per day.
The quick service restaurant sector has remained resilient through economic cycles, including the pandemic and recent cost-of-living pressures, with McDonald’s continuing to expand its footprint and invest in store upgrades across Australia.
JLL pointed to strong investor demand for McDonald’s-backed assets, with recent transactions typically yielding between the high 2 per cent to mid 3 per cent range.
The Yass listing is expected to attract interest due to the scarcity of turnover-based leases, which provide a natural hedge against inflation by linking income growth to consumer spending rather than predetermined increases.
McDonald’s Yass is available for sale via an Expressions of Interest campaign closing at 3:00pm (AEST) on Thursday, April 30.
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