This article is from the Australian Property Journal archive
THE Melbourne headquarters of the Hare Krishna society has been snapped up by a Chinese investor for $15.8 million on a tight 2.77%.
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Savills agents Clinton Baxter and Nick Peden sold the property at 123 Swanston St three weeks prior to close of the expressions of interest campaign.
The vendor purchased the property for just $1.86 million in 1997, after it was passed in at auction.
“This is the state of what is an extraordinary market where a purchaser buys several weeks prior to the close of a campaign with a knock-out offer more than $5.8 million or nearly 60% above expectations for the property,” Baxter said.
“We received intense interest in this asset from many potential buyers with the key attractions being the property’s central position. This is one of the most tightly held city blocks, with years passing without purchase opportunities – indeed it is 16 years since a freestanding property in this central block of Swanston St has sold.
“It is then no surprise that many investors were desperate to purchase this property from the moment it hit the market and that it sold at the staggering rate of $81,500 a square metre of land,” he added.
The eight-level building comprises 1,500 sqm of space and is set on a 194 sqm site. It was sold with five year leases to two long-standing tenants including Downtown Revolution which occupies the ground and basement levels, whilst the Hare Krishna occupies three of the upper levels, returning a current rental of $438,400 p.a.
Peden said the buyer could expect solid income and capital growth with the Melbourne CBD enjoying the fastest growing residential population anywhere in Australia.
“Melbourne CBD’s population growth along with the trend of major international retailers entering the Melbourne market have both enhanced the CBD`s reputation as an international shopping destination and driven rising retail spending and that is not lost on savvy purchasers,” Peden said.
He said the exceptional growth potential of well located CBD properties was clearly demonstrated, the vendor enjoying more than 800% total capital growth over the 18 years of ownership despite events such as the Asian Financial Crisis and the GFC during that period.
Peden said Swanston St was the most popular street for retail property investment with the greatest rental and capital growth over the past 10 years.
Australian Property Journal
