A modern office marketed as a development site in Melbourne’s inner-east Richmond sold at auction last Friday for $5.4 million.
The three-level building, with ground floor car park, 487 Swan Street, was offloaded by former occupier, Longevity Group Australia, previously known as the Transport Friendly Society and before that, the Melbourne Tramways Employees Mutual Benefits Society.
With 754 square metres of area, the fully-leased investment returns a passing annual income of $237,500 from three tenants.
It was marketed with the potential for “great rental reversion”.
On the north-east corner of Belgravia Street, the holding also offers rear access to a right of way.
Mr Baines said the sale price values each square metre of area within the building at $7,160.
Five bidders competed for the investment which sold to a Melbourne-based buyer for about 20 per cent more than the reserve.
“This sale confirms there is still incredibly strong demand for well-located commercial office investments,” Mr Baines said. “It’s incredibly rare to acquire a freehold office building for sub $10 million in the metropolitan market, particularly Richmond”.
In 2009, former state premier Jeff Kennett sold a low-rise office investment at nearby 484 Swan Street, Richmond, for $3.3 million.
The suburb, about two kilometres east of the Melbourne CBD, is considered by both sales and leasing agents as amongst the city’s “hottest”.
In September, we reported that an office developer paid $7.1 million for a 546 sqm site in Stephenson Street, in the Richmond pocket of Cremorne.
We also reported that local builder Costa Fox unveiled plans to build an eight-storey strata office at 1-11 Gordon Street, Cremorne.
Local developer Caydon has also recently started building a nine level 8800 sqm office at 17-21 Harcourt Parade, Cremorne, which upon completion in 2020 will be occupied by technology firm MYOB, which will relocate from Glen Waverley. Two months ago AXA Investment Managers bought this unbuilt office from Caydon, valuing it at about $100 million.
Last year, MYOB committed to a total of about 5250 sqm within two office buildings in Cremorne.