This article is from the Australian Property Journal archive
A COMMONWEALTH Bank building in Camberwell in Melbourne’s inner east has sold for $12.06 million on a yield of 3.5%, demonstrating that demand remains for blue chip investments despite the covid-19 pandemic.
Fitzroys Chris James and David Bourke sold the property at 735-737 Burke Rd on the corner Commerce Lane, on behalf of private vendors that had held the property for 23 years.
A private investor acquired the 844 sqm two-level building set on a 490 sqm site. The agents said the sale price reflected a very sharp 3.5% yield. It was sold with a new seven-year lease with two five-year options to the CBA, returning $425,000 per annum net.
The agents said despite an uncertain environment, $100 million of capital is actively pursuing commercial property assets.
“Investors from around Australia and offshore continue to actively source and compete fiercely for well-located and income-producing Melbourne commercial property assets, even in the uncertain environment,” he added.
He said the highly competitive campaign generated eight offers, meaning there are seven underbidders out there with well over $70 million to deploy into the market.
Fitzroys has sold nearly $20 million in commercial property assets since a state of emergency was declared in Victoria during March. James, Bourke and Fitzroys colleague Shawn Luo have just sold an office building at 372 Wellington Rd in Mulgrave for $6.6 million, which attracted competitive offers from four underbidders.
“These campaigns alone have demonstrated there is a combined $100 million of capital actively pursuing Melbourne commercial property assets,” James said. “Offshore investors’ showed an added interest due to the attractive exchange rate resulting from the lower Australian dollar, as well as Melbourne’s worldwide reputation as an investment safe haven.”
James added that marketing of the asset had to be converted from an auction campaign to expressions of onterest.
“There has been some talk of commercial sales coming to a halt, particularly as auctions have been put on hold, but this campaign witnessed remarkable depth in the bidding, and demonstrated buyers will still chase properties with strong underlying fundamentals.
Bourke said the inner-east has further solidified its status as one of Melbourne’s most highly regarded locations for investors around Australia and overseas.”
