This article is from the Australian Property Journal archive
600 Chapel Street on one of Melbourne’s most in demand corners has transacted on a tight yield of 2.97%, significantly below the 4.6% yield achieved when the property last changed hands.
Occupying the prime corner of Chapel Street and Toorak Road in South Yarra, around 4km south-east of the Melbourne CBD, the 531sqm building with 38 metres of premium frontage on a 373sqm lot.
Daniel Wolman, Oliver Hay and Leon Ma from Cushman & Wakefield, in conjunction with Emmetts Real Estate, managed the off-market sale of the property.
The property sold for $14.9 million in an off-market sale, highlighting the ongoing investor interest.
“The off-market sale of 600 Chapel Street demonstrates that investors remain active despite current debt conditions. Premium opportunities are always in demand, and our team, working with the most active capital, successfully matched the investor with this prime opportunity,” said the release from Cushman & Wakefield.
“We congratulate the vendor on a significant divestment and the purchaser on embarking on an exciting venture within South Yarra’s dynamic commercial landscape.”
At a yield of 2.97%, the sale price reflects a building rate of $28,248/sqm and a land rate of 40,214/sqm.
“It’s probably the most in demand corner in Melbourne and would have seen a lot of interest had it have gone to market,” said Wolman to Australian Property Journal.
“The result would have been good even in strong market, so it was an excellent result in a weak market,” he added.
The property has been occupied by NAB since 1971 and was transacted with a new five-year lease with two three-year options when it last sold at auction in 2022 and favourable CPI +1.5% annual rental incomes, with the sale following a $1.5 million refurbishment by NAB.
At the time of the 2022 sale, when its sold for $16.2 million, the site was 100% leased with circa 73% weighting to NAB and returned a net income of $411,394.
Prior to this, 600 Chapel Street last sold in 2013 for more than $12.82 million, on a 4.6% yield.
Sitting in one of Melbourne’s most affluent suburbs and in the middle of two of the city’s most prime retail strips, the property is surrounded by a premium development pipeline.
