A ground floor retail arcade shop in the St Kilda Road boulevard has sold under the hammer for $1.84 million – 27% above the reserve price.
The auction of 517 St Kilda Road attracted a crowd of approximately 100 people, with 10 bidders vying for the rights to secure the pharmacy tenanted arcade.
Located at the corner of Commercial and St Kilda roads, Shop 1/517 St Kilda Road is leased to ‘Pharmacy 517’, with less than two years remaining on the lease.
The150sqm shop was keenly sought after by both investors and owner occupiers, with bidding interest from three offshore investors, three local investors and four owner occupiers.
The vendor’s reserve of $1.45 million was quickly met after a handful of bids, with the hammer falling on a sale price of $1.84 million to an interstate owner occupier.
CBRE Melbourne Strip Retail Investments’ Rorey James handled the sales campaign alongside Tom Tuxworth and Benson Zhou.
The sale reflected a yield of sub 6% and building rate of more than $12,000 per square metre.
Mr James said the result was both highly encouraging for the retail market in the ground floor space.
“This sale demonstrates the strength of the owner occupier market in particular, which is being predominately driven the record low interest rate level. It is now a more affordable time than ever to buy commercial real estate for business operators,” Mr James said.
Mr Tuxworth added that CBRE viewed the sale as a ‘very positive sign for the retail investment market, particularly given the arcade nature of the property.’
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
