This article is from the Australian Property Journal archive
A SOUTH Melbourne office building has sold for $19.4 million as investors continue to look beyond Melbourne’s CBD for key commercial assets.
The 1,150sqm 31 Market St corner site comprises an extensively refurbished 2,565sqm three-level building and has undercover parking for 41 cars.
The property was purchased by a local investor and there were three under bidders, two Chinese and another local.
It sold on a 5.4% yield, fully leased to ASX-listed, national and government funded tenants, with a WALE of 4.5 years and returning $1.055 million per annum.
The sale price reflected a land rate of $16,207 per sqm and capital value of $7,563 per sqm, and was at a premium to the $18 million initially expected for the asset.
Knight Frank’s Danny Clark, George Burbury and Andrew Hansen and Clinton Baxter, Nick Peden and Benny Zhou of Savills sold the property via expressions of interest, which they said received 10 offers.
Recent Savills figures showed a record $1.39 billion was spent on Melbourne fringe property over 2016, an increase of 31% on the previous year.
Yields averaged 6.63%, an 88 basis point differential over CBD yields at 5.75%.
Australian Property Journal
