This article is from the Australian Property Journal archive
A CHINESE investor has won out from high profile competition to secure a five-level Melbourne CBD office and retail building on King Street, with the $11.98 million price tag reflecting a sharp 2.9% yield.
It also handed the local private vendors a tidy profit on 26-32 King Street, with Abraham and Marlene Zelwer having been held the asset in their super fund after they paid $5.1 million in 2010 at 7.4%.
The circa 1,200 sqm is on a 304 sqm site and is leased to multiple tenants, including 7-Eleven at ground level, and returns around $352,000 per annum net.
Savills agents Clinton Baxter, Ming Li and Jesse Radisich sold the asset, located adjacent to the Rialto Towers and which attracted the attention of its high-profile co-owners the Grollo Group, which has accumulated a string of properties along King Street as the strip slowly evolves from infamously seedy reputation.
Grollo Group owns the entire stretch from Flinders Lane to Collins Street on King Street’s eastern side after picking up the infamous Inflation nightclub site at 54-60 King Street for $17 million earlier this year.
The Grollos have publicly floated the idea of introducing more hospitality space to the area. Meanwhile, Jonathan Hallinan’s 30-level hotel development at 33 King Street attracted the attention major Indian player InterGlobe, which paid for $91 million for the site.
“The scarcity of Melbourne CBD properties on the market, particularly below $20 million, is apparent among active buyers, resulting in significant pent-up demand,” Baxter said.
“The buyer was seeking to secure a prime CBD asset for long-term capital growth, and this sale demonstrates the strong market appetite for premium properties generating solid income within the CBD,” Baxter said, adding that prospective buyers were attracted to the asset for its prime location within the city’s rapidly developing western corridor and close to the Crown Entertainment Complex.
“The explosive growth occurring in the west end of the CBD has resulted in rapidly escalating land and capital values,” Baxter said.
Australian Property Journal
