Local buys Kew Junction ex-bank

The Cotham Road property sold for $5.007 million.

A double fronted two storey Kew Junction building for years owned by the Commonwealth Bank of Australia has sold for $5.007 million.

A Kew Junction office at 85-87 High Street hit the market last month.

Nowadays a hospitality investment, the result for 26-28 Cotham Road reflects a 3.1 per cent passing yield rising to 3.87pc based on the return as of this November.

The buyer is from Kew.

The deal comes a month after a much more substantial Kew Junction commercial building – an office at 85-87 High Street – hit the market with $17m-plus price hopes.

Vinci Carbone’s Frank Vinci and Joseph Carbone with Gorman Commercial’s Peter Bremner, Tom Maule and Jonathan McCormack have that listing.

Fitzroys’ Chris Kombi, Chris James and Ben Liu marketed 26-28 Cotham Rd.

Investment, landbank, development site

The result for 26-28 Cotham Rd is a boon for the vendor who paid $4.1m in September, 2012.

That seller was a partnership comprising George Calombaris which outlaid $1.9m in 2009, refit the 635 sqm of area as a restaurant – trading as a Hellenic Republic then St Katherine’s – then offered it with a leaseback (story continues below).

Ayhan Erkoc and Federico Perez Lopez (left) and George Calombaris.

The property sat vacant for 24 months between early 2020-2022.

The Cotham Road building contains two restaurant tenancies.

Last January, two more restaurateurs – Ayhan Erkoc and Federico Perez Lopez – leased it for an initial six years; it contains two businesses, Cotham Dining and Nazar Wine Bar.

The 515 sqm Commercial 1 zoned block with rear street access would have development upside after that if the tenants don’t renew the first of two six year options.

“The [$5,006,666] result is yet more evidence of the strong demand for quality investment grade retail assets, despite the higher interest rate environment and a lot of negative market commentary,” Mr Kombi said.

“Investors continue to put their faith in the resilience of bricks-and-mortar investments,” he added.

“Astute investors recognised the opportunity to acquire a well presented, well-proportioned hospitality building in central Kew Junction with a secure lease generating a strong rent return that will look all the more favourable as inflation continues to ease and interest rates normalise,” according to the agent.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.