The 114 square metre two-storey building, opposite QV, has been leased to Lebanese House Restaurant since 1959. It pays a low rent of $31,150 per annum, or around $275 per square metre which is now likely to be reviewed.
Knight Frank selling agent Clinton Baxter confirmed the property sold at auction for $1.7 million.
According to the agency, retail sales on secondary CBD shopping strips like Russell Street typically exhibit yields of 5 to 6 per cent.
Meanwhile, retail shops in Chapel Street continue to fetch more than the price of small office buildings, with a private investor snapping up the Zu store at 461 Chapel Street for $6.25 million, on a low yield of 4 per cent.
Along with the recent sale of the French Connection store, the value of retail shops sold in the trendy suburban strip in the last three weeks is $13.8 million, according to Teska Carson selling agent Michael Ludski.