A Malaysian family has paid $8.6 million for a freestanding “trophy” asset in Melbourne’s Queen Street.
Yesterday’s auction result – $600,000 over reserve – reflects a 1 per cent yield based on the investment’s current annual rental return.
Known as the Queen Victoria Building, the red-brick warehouse, built in 1925 at 438 Queen Street, rises three storeys and includes 1440 square metres of area.
It occupies a 481 sqm corner block zoned Capital City 1 with significant redevelopment potential.
Four parties contested for 438 Queen Street.
The sale price values the land at $17,917 per sqm and the building area at $7,166 per sqm.
Queen Victoria Building was offloaded by private investor David Tweed – who reportedly bought it directly from the owner about five years ago for $3.8 million.
“With so few freestanding assets hitting the Melbourne CBD market, 438 Queen Street provided the market with one of the last freestanding blank canvases to be offered in 2018,” Colliers International’s Oliver Hay said, adding the property could make way for an array of end-uses.
“The campaign attracted interest from developers, investors and owner-occupiers who were all after a piece of the city’s history.”
The dominant corner property located in the heart of Melbourne’s Queen Victoria Market precinct and Elizabeth Street 24-hour precinct has triple street frontage spanning 69 metres, the agent said.
“The surrounding area is home to the proposed $250 million QVM renewal and the Melbourne Metro Rail project which are both well under-way and expected to stimulate the immediate precinct to unprecedented levels.
“These characteristics present scope for the building to be used as a powerhouse office headquarters, hospitality or student accommodation” Mr Hay said.
“This is such a unique opportunity – rarely does a freestanding CBD asset with such obvious locational upside come to market.”