‘The Block’ cafe snapped up before auction

A Melbourne cafe built as part of reality TV show The Block has sold for $975,000, just days before it was scheduled to go to auction.

A local investor swooped on the property on the corner of Commercial Rd and Punt Rd in South Yarra, which was created on the ground floor of the former Hotel Saville when it featured on the Channel 9 reality series in 2015.

Dubbed “The Blocktagon”, the building was bought by Channel 9 in 2014 for about $7 million, with the upper levels transformed into luxury apartments and then auctioned as part of the show.

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The ground floor property is operated as trendy eatery Mr. Zen, and features 133sqm of internal space and a massive 195sqm landscaped outdoor terrace.

The cafe, which features a huge outdoor area, was sold prior to auction.

Due to be auctioned on June 28, the cafe was sold days earlier after keen interest and competition from numerous Melbourne buyers.

The property was being marketed by Marcus Klinge and Mark Smedley from Dixon Kestles, with Klinge saying the eventual buyer and another potential suitor both wanted to secure it before auction.

“We had quite a lot of enquiry,” Klinge says.

“It was scheduled to go to auction but we actually had two punters that requested to make an offer prior.”

The cafe was built in 2015 as part of a previous series of The Block.

“They came in at $950,000, which was close … but we said you need to sharpen your pencil.”

Klinge says an offer of $975,000 was enough to secure the deal, with earlier estimates suggesting it might nudge $1 million.

With the cafe currently leased for $47,380, the sale price reflected a tight 4.85% yield.

The cafe has three years remaining on its current lease, with a further two four-year options.