A freestanding, art deco Melbourne CBD building has sold off-market for $8.45 million as investors continue to show their faith in the future of the city.
The sale, negotiated by Fitzroys' Chris Kombi, reflected a sharp initial yield of 1.3%, and huge land rate of $41,625 per sqm. Primely located at 267 Little Collins Street, the building is situated on 380sqm and comprises of three levels with retail on the ground and new global music bar Fika Island over levels two and three. It returns a combined $110,000 per annum net, with a 5+5-year lease to Fika Island and a monthly agreement on the ground floor.
“Even with further interest rate rises expected, investors still clearly consider CBD freeholds to be a safe place to put their money in the medium-term and this part of the market remains very competitive,” Kombi said.
The building was sold on behalf of Central City Holdings Pty Ltd and purchased by a private investor.
“It’s another show of faith investors have in the future of the CBD. There’s widespread confidence that visitation rates will continue trending upwards and we’ve already seen a great rebound in night-time and weekend numbers,” Kombi said.
City of Melbourne pedestrian traffic data shows night-time activity is up across the CBD’s dining precincts, and weekend visitation throughout the Grand Prix, Comedy Festival and early footy season was recorded at higher than pre-pandemic levels. Fika Island is one of a number of new bars and hospitality venues that have recently opened as operators look to capture the spike in activity.
“The property also serves as an excellent land bank opportunity. The 203sqm site is zoned Capital City 1 and the purchaser can earn a significant income stream from a secure lease while assessing its longer-term options,” Kombi said.
The property is in a thriving CBD location located between Swanston and Elizabeth Streets, opposite The Walk, diagonally opposite David Jones and neighbouring Howey Place Shopping Arcade and close to Royal Arcade and Block Arcade. Nearby retailers include T2, Seiko, Maje, Hunt leather, Patagonia, Scanlan Theodore, and Hype DC.
