A double fronted two storey Kew Junction building for years owned by the Commonwealth Bank of Australia has sold for $5.007 million.
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.
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).
The property sat vacant for 24 months between early 2020-2022.
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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