A local land banker has sold its circa 545sqm corner landholding, located just off Brunswick Street in Melbourne’s Fitzroy, on a 13-day settlement.
The $3.8 million sale represents $6,972 per square metre on the land, $7,308 per square metre on the building and a 1.75% yield.
The single-level, converted warehouse at 12-18 St David Street currently operates as a dairy production facility, occupied by St David Dairy, which was recently acquired by the owner of Maggie Beer Products, Longtable Group.
Mr Mufale said, “With multiple lease options and a potential 10-year tenancy prohibiting the property’s short-term development potential, this wasn’t a straight forward sale.”
“With a restrictive long-term lease and likelihood of nominal income over the period, we sourced a buyer that was prepared to sit and hold the investment for an extended stretch on a marginal return,” Mr Mufale said.
Mr Mufale said a recently issued rising land tax certificate, equating to 42% of the total income, was a key driver for the vendor to sell – with several city fringe owners relaying the same issue.
Mr Minty added; “The city fringe market continues to drive strong results, despite regulatory driven curbs in the availability of credit.”
“Buyers understand that population growth will underpin long-term capital growth in the CBD and immediate fringe suburbs,” Mr Minty said.
“The site offered secure income, a strong tenant profile and future development scope in a popular city fringe apartment location – fundamentals that investors and land bankers are looking for in 2019.”
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