Hare Krishna building fetches huge price

A Melbourne CBD property that is home to the Hare Krishna organisation has sold for $15.8 million.

A Chinese investor snapped up the eight-storey building at 123 Swanston St three weeks before an expression of interest campaign was due to finish, after a 16-year wait between property sales on that CBD block.

The Hare Krishna’s Melbourne arm occupies three of the upper levels and runs a restaurant and yoga centre from the premises, while retailer Downtown Revolution leases the ground and basement levels.

This is one of the most tightly held city blocks, with years passing without purchase opportunities

The sale came in $5.8 million over projections, with the final price seeing the yield tumble to 2.77%. The two major tenants are both on five-year leases for a combined $438,400 per year.

The building was sold three weeks before the expression of interest finished

Agent Clinton Baxter of Savills says the pumped-up price wasn’t unexpected, as commercial real estate in that pocket of Melbourne’s city centre is rarely put up for sale.

“This is one of the most tightly held city blocks, with years passing without purchase opportunities,” Baxter says.

“It is 16 years since a freestanding property in this central block of Swanston Street has sold.”

Retail outlet Downtown Revolution leases the lower levels at 123 Swanston St

“We received intense interest in this asset from many potential buyers with the key attractions being the property’s central position on the favoured western side of Swanston St between Collins St and the Bourke St Mall, the high calibre of the tenants, value-add opportunities and strong rental growth potential.”

Savills reports the previous owner bought the property for $1.86 million in 1997 after it was passed in at auction.