This article is from the Australian Property Journal archive
A STRATA retail investment at Little Collins St in Melbourne’s CBD has sold for a record sharp yield of 3.6%.
Colliers International’s Daniel Wolman, Oliver Hay and Chris Ling sold a 94 sqm strata retail property on two titles, Shops 9 and 11 at 1 Little Collins St, at auction for $2.64 million.
Ling said this sharp yield represents the strength in the current market, driven by incredibly low interest rates.
“The buyer was a local private investor who was aware of the challenges in competing with offshore investors given our low Australian dollar. The strongly contested auction generated around 20 bids from a large crowd of over 100,” Ling said.
Hay said the location of the asset was “as good as it gets” in the Melbourne CBD, being at the prime Paris End of the city next to the Sheraton Hotel, Hotel Windsor and the new high-end apartment towers coming to the market at 35 and 85 Spring St.
“Properties of this nature do not become available very often and therefore we saw a very high level of enquiries from over 200 buyers both locally and offshore.
“The record yield for strata retail in the CBD before this was also 3.6% and also achieved by Colliers when we sold the backpackers travel agency next door to the corner of Flinders and Degraves St last year,” he said.
“Off the back of this campaign and the circa 2% yields that were offered last week at the auction of 471 Elizabeth St – a prime freestanding asset that went to auction last week near the Queen Victoria Market – there is no sign of the market slowing down,” Wolman said. “We are already seeing momentum in new listings and purchasers coming to the market for 2016.”
“We have a huge influx of purchasers looking to put money in prime CBD property, and with limited stock, competition will only increase. Properties in prime locations with secure tenants will be particularly sought after,” Wolman concluded.
Australian Property Journal
