This article is from the Australian Property Journal archive
A MELBOURNE investor with strong links to Malaysia has snapped up the OPSM building in Melbourne CBD for $15 million on a yield of 3.07%.
Savills’ directors Clinton Baxter and Nick Peden handled the sale of the 384-386 Bourke St property and said it was further evidence of the ongoing yield compression and the land rate of $29,182 per sqm also underscored investor’s continuing confidence.
This transaction comes hot on the heels of Baxter and Peden’s sale last week of 14-16 Collins St for $12 million on a record low yield of 1.3%
“Whilst some pundits were predicting an easing of land values following Planning Minister Wynne’s recent announcement of Interim Planning Controls, this transaction along with our recent sale of 10-16 McKillop St ($10.5m) illustrates that land values remain strong with investors appreciating that over the long-term the CBD built environment simply must increase in density to accommodate our rapidly rising population.
“The yield also shows that investors are factoring in strong future growth as Melbourne’s CBD continues its rapid transformation into a 24-hour global city with a significant increase in population density,” Baxter said.
Peden said interest in the 514 sqm property was very strong as the site offered significant future value-add potential and the lease to longstanding blue-chip tenant, OPSM. The three level building was sold subject to a lease to OPSM at a net rental of $460,576 per annum.
“The property’s numerous attributes attracted extremely strong interest throughout the sale campaign, particularly from offshore groups, eventually selling to a local investor with strong links to Malaysia who wishes to retain the property as-is as a long-term investment.
“Ultimately it was blue chip income and the extraordinary development potential in a very strong location that delivered the result,” Peden said.
Australian Property Journal
