Corner shops break land price record
A small Melbourne corner store and neighbouring shops have sold at auction for a record-shattering price.
Less than a month after the sale of the Hare Krishna organisation’s headquarters on CBD strip Swanston St, which broke the city’s land price record when the building achieved $81,500 per square metre, a group of shops further up the street has trumped the monumental benchmark.
Former record: Hare Krishna building fetches huge price
An Asian investor beat off local interest, as well as other investors from China, Malaysia, Indonesia and Hong Kong to secure the property at 319-325 Swanston St for $26 million – an incredible $82,278 per square metre of land.
The strip features a corner store and a number of Asian restaurants
The three-level building on the corner of Little Lonsdale St has a historic facade but was rebuilt 18 months ago and is leased to five tenants on long-term leases. Convenience store EzyMart holds the prime corner position, alongside Asian restaurants Gong Cha, Hot Star and Mr Kitchen.
Many local investors were extremely keen to purchase this property, but they simply couldn’t match the fire-power of cashed-up private investors from Asia
The shops are currently leased for a combined $1.013 million dollars, tightening the building’s new yield to a slim 3.9%.
Savills agents Clinton Baxter and Nick Peden brokered the deal and say the property attracted intense international interest.
“Many local investors were extremely keen to purchase this property, but they simply couldn’t match the firepower of cashed-up private investors from Asia,” Baxter says.
The group of five shops sold for $26 million
“The key attractions being the property’s corner position on the favoured western side of Swanston St adjacent to Melbourne Central Shopping Centre, the high calibre of the tenants, long leases and fixed annual rental growth well into the future.”
The property industry was already agog after the Hare Krishna building sold for $15.8 million in early July – a whopping $5.8 million over predictions.
Peden says Swanston St has quickly become the city’s most popular street for retail property investment.
“Melbourne CBD’s population growth along with the trend of major international retailers entering the Melbourne market have both enhanced the CBD’s reputation as an international shopping destination and driven rising retail spending and that is not lost on savvy purchasers,” he says.
