Melbourne, 23 April 2014 – A private investor has acquired two ground floor retail properties in the heart of the Melbourne CBD prior to auction for $2.1 million.
Located at the foot of the Q2 office tower on the corner of Flinders and Queen Streets, the two retail properties total 89.8sqm in size. The properties are currently leased to Melbourne City Convenience and Sharon N Developments.
Josh Rutman, Ed Wright, and Tom Tuxworth from CBRE Melbourne City Sales negotiated the sale of the two properties on behalf of appointed receivers and managers, KordaMentha. The transaction equated to $23,385 per square metre – a passing yield of 3.6%.
Mr Wright said the property attracted significant buyer interest, as demonstrated by the sales result.
“This property being purchased by a local investor 24 hours prior to auction is evidence of the current pent up demand for sub $5 million retail assets in well placed CBD positions,” Mr Wright said.
“This asset benefits from more than 20 metres of CBD corner street frontage, providing maximum exposure to commuters, office workers, tourists, students and residents.”
The property is located opposite Flinders Street train station and in close proximity to several prominent office towers and Melbourne landmarks.
The sale follows the recent sale of 16 Degraves Street for $3.15 million on a yield of 4.89% and 353-355 Flinders Street for $1.67 million (4.58%).
“What we are witnessing with local sub $5 million investors is that they are back in the market and have been given the green light from their banks to borrow funds and purchase commercial properties, with ground floor shops being the preference,” Mr Wright said.
“This is adding a strong level of competition to the market, with offshore investors still remaining the strongest and most aggressive buyers for ground floor shops.”
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