Metropolitan Hotel in Melbourne CBD sold under the hammer for $8.61 million

Melbourne’s Metropolitan Hotel has exchanged hands, snapped up by a local investor for $8.61 million at auction and adding to a flurry of deals this month totalling more than $15 million.

The iconic corner street pub at 263-265 William Street has a history spanning 160 years.

The sale reflected a yield of 2.38 percent - the strongest ever for a Melbourne CBD pub, according to a media release. 

CBRE’s Josh Rutman, Mark Wizel, Paul Tzamalis and Scott Callow brokered the sale along with Killen Thomas agent David Marks.

Rutman said the hotel’s sale attracted widespread buyer interest, as evidenced by the auction.

“With nine bidders competing on the day, many being multiple CBD owners, the appetite for well-located corners in the city is evident."

Lazaros Papasavas – multiple owner of CBD assets and one of the underbidders for the property on the day - said, “We've been very encouraged by the activity and growth in the CBD market over the last 12-18 months, and... understand the value of this market well and, despite prices increasing, see great value in the CBD."

In addition to the Metropolitan Hotel, The Great Western Hotel at 204-208 King Street also changed hands for $6.5 million on a yield of 2.9%.

Rutman said the recent transaction flurry was testament to the growing strength of the western end of the CBD.

"We are experiencing the strongest selling conditions in the Melbourne CBD in more than 30 years and there is no fundamental indicator pointing to why it should slow down,” he said.