Historic, high-profile Balaclava corner building sells for $7.5 million at hot auction

A high-profile, historic red brick building within Balaclava’s popular Carlisle Street retail strip sold at auction last week for $7.5 million.

More than 100 attendees sweated through the event held onsite in 38 degree heat with a northerly gale.

The double-storey, 515 square metre retail building with upstairs office occupies a 368 sqm Commercial 1 zoned block at the south east corner of William Street.

Fully leased, returning annual rent of $262,260, the asset is selling on a low passing yield of 3.29 per cent.

More importantly, the deal values every square metre of the site at $20,380 – more than twice the record price set just a year ago.

The site (highlighted) relative to Balaclava train station, St Kilda foreshore and Melbourne CBD.

The asset was offered by George and Heidi Koumantatakis, who paid $3.215 million for it in early 2006.

The pair run Camberwell’s Car Park Cafe and in 2014 opened a wholefoods restaurant in Glen Waverley.

Mr Koumantatakis is a developer, too, in 2014 unveiling plans for a six storey apartment complex at 22 Toorak Road, South Yarra.

Emmetts Real Estate’s Andrew Milligan, Charles Emmett, Geoff Emmett and James Beresford marketed 229-237 Carlisle Street as Balaclava’s best retail corner – with longer term redevelopment prospects.

At present, though, it is a passive investment.

Popular restaurant chain Grill’d occupies part of the ground floor.

Other restaurants in the area include Ilona Stoller, Ziggy’s Eatery, Batch Café, Yo-Chi and Las Chicas.

Coles, Woolworths, Chemist Warehouse, Priceline, grocer The Little Hen and all the major banks are also in the vibrant Carlisle Street pocket.

A block from the Balaclava train station, 229-237 Carlisle Street, which could also be gazetted as being in St Kilda East, is across the road from a new mixed use project comprising 38 apartments atop ground floor retail.

Mr Milligan described the property as a classic Melbourne trophy.

Declining to comment about the purchaser, or vendor, the executive said of the market – that there are plenty of private investors seeking assets like 229-237 Carlisle Street.

Restaurant Grill’d occupies a ground floor tenancy.

Most of the prospective suitors who inspected this site had no immediate redevelopment plans, Mr Milligan said.

In August, we reported that a 301 sqm at 60-62 Nightingale Street, until recently controlled by failed developer Steller, sold with a permit for a five-storey office for less than $2 million.

Last year we reported that a nearby 1011 sqm site at 23 William Street – which cannot be replaced with apartments given its zoning (unlike the Emmetts listing) – traded for $9.5 million, setting a then-record price for the land of $9,396 per sqm.

Part of the building is used for yoga classes.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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