This article is from the Australian Property Journal archive
TWO Melbourne CBD buildings have sold at separate auctions for over $22 million, including one that sold following a marathon hour-long battle between five bidders.
Nearly 160 bids were made for 485 Elizabeth Street, which sold for $12,025,000 in front of a 200-strong crowd.
The sale price for the three-storey building, with a net lettable area of 711 sqm, exceeded the owner operator of 30 years by $3,525,000, and represented a yield of 1.63%.
Anthony Kirwan, Oliver Hay, Daniel Wolman and Leon Ma of Colliers sold the property.
Kirwan said the sale of the prominent building represented a rare freehold investment, development or owner-occupier opportunity in the heart of the Melbourne CBD.
“The auction was contested by a mix of buyer profiles as well as many offshore bidders, however the majority of the historic hour-long battle was between two local groups.
“The incredible result can also be attributed to a combination of a very limited number of good quality CBD assets on the market, strong presence of cash buyers, and local buyers who were willing to fight ferociously to get their hands on an asset that hasn’t hit the market in 30 years.”
The building is situated between Franklin and Victoria Street, close to the Queen Victoria Market and the University of Melbourne as well as RMIT, while major high-traffic shopping destinations including Melbourne Central, Emporium, Myer, David Jones, Zara, H&M are also nearby.
“Despite rising interest rates we are receiving, countless active buyers and under-bidders from such campaigns eager to secure commercial assets that come to the market, particularly properties with rental upside and value-add opportunities within the Melbourne CBD grid,” Hay said.
Meanwhile, the Colliers agents also sold a trophy CBD building for $10 million to an offshore investor making their first Melbourne purchase.
The mixed-use building at 365 Lonsdale Street has 770 sqm of building area with the ground floor leased to a Korean supermarket and the upper floors currently vacant.
The agents said the expressions of interest campaign saw 102 buyer enquiries, 28 inspections and 12 offers.
Offers came from groups based in Australia, Singapore, China and Vietnam, Hay said.
‘The 12 offers were received from owner occupiers, local investors, offshore investors and value-add/developer buyers, that amounted to $104,204,800 million in buyer appetite.”
The property was purchased by a first time entrant to the Australian property market, a private family from Vietnam who had been waiting to travel to Melbourne for two years to secure a CBD freestanding building, Kirwan said.
