"The final figure transcended the local private vendor’s reserve by $3.525 million, showcasing just how valuable landholdings in the middle of the city remain."
The CBD played host to a bevy of major sales recently, with the most notable featuring a bidding war between five eager would-be buyers, contested on the busy streets of Melbourne.
A battle on Elizabeth Street
483-485 Elizabeth Street was sold for $12.025 million, as investors demonstrated their appetite for quality assets in one of the highest density areas in Australia. The sale price represented a tremendously tight yield of 1.63%.
For Colliers’ Anthony Kirwan, who marketed the property alongside Oliver Hay, Daniel Wolman, and Leon Ma, this property was a unique offering that exceeded any expectations established by the agency.
“Opportunities of this kind in the heart of the Melbourne CBD are rare and as such, we witnessed a hot contest that exceeded even our expectations,” commented Mr. Kirwan.
“The auction was contested by a mix of buyer profiles as well as many offshore bidders, however the majority of the historic hour-long battle was between two local groups.”
Auction for 483-485 Elizabeth Street, Melbourne VIC 3000
The final figure transcended the local private vendor’s reserve by $3.525 million, showcasing just how valuable landholdings in the middle of the city remain. Despite office worker vacancy rates for June stagnating and the RBA raising the cash rate at the start of July, the commercial property market remains bullish on the value of such sites.
“The incredible result can also be attributed to a combination of a very limited number of good quality CBD assets on the market, strong presence of cash buyers, and local buyers who were willing to fight ferociously to get their hands on an asset that hasn’t hit the market in 30 years,” Mr. Kirwan added.
483-485 Elizabeth Street is comprised of a three-storey building on a 263 sqm site. It possesses a net lettable area of 711 sqm, and is surrounded by some of Melbourne’s finest lifestyle amenity and public transport options.
Lonsdale site sells strong
Situated just around the corner from 485 Elizabeth Street, Colliers facilitated the successful transaction of 365 Lonsdale Street office building, securing a $10 million sale after 102 buyer enquiries, 28 inspections and 12 offers.
“The 12 offers were received from owner occupiers, local investors, offshore investors and value-add/developer buyers, that amounted to $104,204,800 million in buyer appetite,” stated Anthony Kirwan. He brokered the sale for 365 Lonsdale Street alongside the same Colliers agents he worked with for 483-485 Elizabeth Street; Oliver Hay, Daniel Wolman, and Leon Ma.
365 Lonsdale Street, Melbourne VIC 3000
“The property was purchased by a first-time entrant to the Australian property market, a private family from Vietnam who had been waiting to travel to Melbourne for two years to secure a CBD freestanding building.”
The property in question is made up of a three-level mixed use office and retail building underpinned by a 415 sqm landholding with a building area of 770 sqm. The ground floor is leased to a Korean supermarket, and the upper floors are currently vacant.
“The property was deservedly well-sought after due to its flexibility and premium location, allowing for multiple buyer profiles to participate in the campaign,” stated Oliver Hay. “It was pleasing to see such strong demand from offshore groups, highlighting the bounce back in the Melbourne CBD office market.”