A double fronted two storey terrace within cooee of Bourke Street Mall is selling for $22.5 million.
The deal for 384-386 Bourke Street values each square metre of land at $47,771.
With an internal area of 1164.5 sqm, the building rate is close to $20,000.
Offered with a 10-year lease to a hospitality occupier which will pay starting annual rent of $586,275 from March, following a renovation, the property exchanging on a passing yield of less than 3 per cent.
The vendors, private investors, paid $15 million for the asset in 2015.
At the time, glasses retailer OPSM had about three years left to run on a lease.
Mark Wizel, Julian White, Nathan Mufale and Chao Zhang from CBRE marketed 384-386 Bourke Street this time around.
On a 471 sqm plot with 10 metres of Bourke Street frontage and potential retail activation via the rear Warburton Lane, the investment is opposite National Australia Bank’s global headquarters which is under construction.
The corner of the Bourke Street Mall and Elizabeth Street is less than a block away.
“The compressed yield highlights that investors are banking on further interest rate cuts to create a greater yield spread between rentals and acquisition costs,” Mr White said.
“Investors are also hunting for trophy assets and are less phased by immediate rental returns given the CBD’s strong underlying market fundamentals.”
The agents said ten offers were received for the property, with a strong mix of local and Asian backed investors.
Mr Zhang said the offshore bidders included parties who would be new investors to Melbourne.