Lonsdale Street, Melbourne building sells at 2.58% yield
Jennifer RobertsonDecember 7, 2020
A corner retail building in Melbourne’s CBD has sold to a local investor for $7.15 million.
More than 150 people attended the auction for the property, located on the corner of Lonsdale Street and Drewery Lane, but it was not sold until shortly after the auction.
It last sold for $4.1 million in 2008.
The 498-square metre, 4-storey building (pictured below) is freestanding and in an ideal location with triple street frontage and situated next to Melbourne Central QV complex and opposite the new Emporium Melbourne complex.
CBRE agents Josh Rutman, Ed Wright and Mark Wizel handled the properties sale and say that it’s success is part of a larger trend in investor interest in the Melbourne CBD.
“The sale… illustrates the confidence of investors, and more importantly their banks, in this up and coming retail precinct,” Mr Rutman says.
A recent CBRE review highlighted strong investor demand for Melbourne CBD properties priced between $2 million and $10 million.
It also noted that only 4 notable transactions of this kind were completed in the second quarter of 2013, showing a lack of opportunities to purchase in this market.
The Lonsdale property returns a yearly rental income of $195,806.
CBRE said it translated to a yield of 2.58%.
CBRE Melbourne City sales division says it has potential to be developed as retail, office or residential space, subject to council approval.
Recent low interest rates and Melbourne’s strong population growth have contributed to a renewal of local investor demand, but Mr Wright says it is rare to find a property of this kind.
“Very rarely does an opportunity to purchase a freehold property in the retail core become available, let alone a corner property with triple street frontage, which is directly opposite what is mooted to be Melbourne’s most prestigious retail centre,” he says.
The building was home in the mid-1990s to the retailer, Fax & Typewriter City.
