- Sold to private offshore investor
- Located close to Melbourne Central Station and other landmarks
- Retail is starting to see more customers return to physical stores
Sitting a stone’s throw from the State Library of Victoria, Melbourne Central Station and other Melbourne landmarks is a retail asset that was recently sold to a private offshore investor for $32,610,000.
The property
Located at 272-282 Lonsdale Street, the two-storey property with rooftop signage has 19.28 metres of frontage and sits on a 413-square-metre site.
It is currently home to four ground floor shops and a first floor restaurant, generating a combined income stream over $1 million in passing rental. The property sold at a yield of sub 3, a land rate of $78,958 per square metre, and building rate of $39,914 per square metre.
All current leases are structured to allow vacant possession by 2027.
The property has also been with the same owner for almost 20 years, it previously changed ownership in 2003 when Katerina Developments purchased the property.
Sold by Colliers in conjunction with JLL, the property is in Melbourne’s retail “golden triangle” and is in close proximity to new metrol tunnel stations and has large street frontage and flexible zoning.
Commentary
The property received a total of eight bids from local and international investors during the international expressions of interest campaign who were all drawn to the property’s unique location.
Colliers National Director Oliver Hay said the asset benefits from extremely high traffic, which saw several investors looking to snap up this rare retail opportunity with a strong rental and capital growth potential.
“Despite rising interest rates and inflation, the retail sector remains confident as sales continue to outperform market expectations. As we leave the pandemic behind, location is more important than ever when we’re seeing a rapid spike in customers returning to physical stores.
Oliver Hay, Colliers
Colliers’ Leon Ma added “Being situated in the epicentre of Melbourne’s retail core and arguably one of the most popular and recognisable intersections in the CBD, Swanston and Lonsdale Street, a location of this calibre brings endless growth opportunities for this asset.”
JLL Director Nick Peden said a future 272-282 Lonsdale Street could present a multi-level retail, commercial, boutique hotel, hospitality and rooftop activation, alternatively adding further levels to the existing building.
“All current leases are structured to allow vacant possession by 2027, which provides the new owner flexibility to capitalise on the Melbourne CBD’s dynamic retail market by adding value, redeveloping or potentially owner occupy,” said JLL’s Josh Rutman.
