Inner-city Melbourne warehouse with office redevelopment potential sells for $9.9 million
Another Richmond warehouse with high-rise redevelopment potential has sold following a campaign contested by a mix of prospective buyers.
The 1381 square metre site at 157-161 Burnley Street (pictured top, left and bottom) traded at auction on Friday for $9.92 million.
Occupied by Get Wines Direct, which pays annual rent of $280,000 – but whose lease is also subject to a demolition clause – the property was marketed for its medium-term development prospects.
It is selling to a private investor who may consider rebuilding on the site in future.
The marketing agents said the site, zoned Industrial 3, could hold a commercial building of about nine storeys.
Also with frontage to Blazey and Murphy streets, the property is about three kilometres east of the Melbourne CBD.
CVA director John Nockles, who marketed 1320 sqm building with colleague Ian Angelico and CBRE’s David Minty and Julian White, said the campaign generated diverse demand, with owner occupiers in the mix.
Investors and land bankers showed just as much interest in the site as developers, he added. Based on the rent the asset generates, it is selling on a passing yield of 2.8 per cent.
Three weeks ago, a showroom occupied by Adairs at 487-495 Bridge Road, Richmond, sold at auction for $14.8 million, more than $4 million over price expectations.
An Asia-based syndicate outbid local developers including George Saade and Nick Williams for this 1658 sqm holding.
Mr Nockles said that the Burnley Street sale, and also that of the Adairs site, “has really underpinned the market’s perception of that pocket of Richmond for land banking and also future development”.
“Its not just about Cremorne anymore as we seek to find inner-city locations to fuel the demand for office space out of the CBD”.
Earlier this year, MAB Corporation paid more than $7 million for two adjoining warehouses covering 43-57 Blazey Street, Richmond. We reported in August that the local developer is planning to replace this 1372 sqm site with a seven-level, 5444 sqm office.
CostaFox also recently unveiled plans to build an eight-storey building, with 5464 sqm of strata-office space, at 1-11 Gordon Street (pictured, left), in the Cremorne pocket of Richmond.
