The former Prahran Post Office in Greville Street has changed hands for $13.38 million – almost 50% above what it last traded for in 2013.
The three-level heritage building was acquired by a locally-based Chinese family, amid a resurgence of activity in Melbourne involving both domestic and offshore Asian capital.
CBRE’s Kevin Tong, who marketed the 168 Greville Street property with Mark Wizel, Rorey James and Julian White, said CBRE’s Asian Services Desk had witnessed this resurgence first hand, with Asian buyers accounting for 19 of the team’s 27 sales in the past nine weeks.
“We have seen a spike in demand for Melbourne properties, with the recent fall in the Australian dollar having had a positive impact on Chinese buyer confidence in commercial property acquisition,” Mr Tong said.
CBRE National Director Mark Wizel noted that buyer interest had also extended beyond development site sales, with investment assets – particularly those in the retail sector – attracting increased demand.
“In the case of 168 Greville Street, the heritage nature of the property limits future development opportunities, however the underlying income provides a secure return for the purchaser,” Mr Wizel said.
Occupying a 734 sqm site on the corner of Greville and Macquarie Streets, the former post office was fully restored in 2010.
It is currently leased to tenants including the Angus & Bon steakhouse, GoPro and the College of Intensive Care Medicine, who anchor the building.
Based on the net annual rental of approximately $610,000, the sale price translates to a yield of 4.5%. It reflects a land rate $18,481/sqm and a building rate of $9,523/sqm.
Mr Tong noted that the international Expressions of Interest campaign had yielded nine offers, with three strong contenders emerging in the second and final round of the campaign.
“Our vendor was aware of the incredible yield compression for this style of investment in Melbourne, with the eventual sale price being more than 250 basis points sharper than when the building last traded in 2013 for $9.1 million,” Mr Tong said.