A Hobart CBD retail investment, occupied by Officeworks, has sold for $11.725 million to a buyer from mainland China.
Based on the annual rental return the property at 105-109 Campbell Street derives ($725,000), the deal is being struck on a passing yield of 6.2 per cent.
The freestanding 2785 square metre building sits on a 3236 sqm block.
Wesfarmers backed Officeworks recently committed to a five year lease. The building includes 49 car parks.
The property generated interest from local and offshore investors, CBRE marketing agent Lewis Tong said.
“The [auction] result indicates that yields have continued to sharpen for retail investment properties, particularly those which have a significant underlying land holding,” he added.
The deal also highlighted “continued offshore buyer demand for retail assets and a broadening in focus from residential to commercial investment opportunities”.
Mr Tong marketed 105-109 Campbell Street with colleagues Joseph Du Rieu and Mark Wizel.
“The limited supply of investment grade retail properties on the market is leading to further yield compression for investments leased to national tenants. With the current environment characterised by a lack of premium, retail investment offerings, we are seeing increased demand for assets located in outer metropolitan areas which are experiencing population growth, especially in markets such as Hobart,” Mr Du Rieu said.