Chinatown building’s price jumps 237% in five years
A building in the heart Melbourne’s bustling Chinatown has sold for $6.3 million, delivering a staggering 237% lift in value in just five years.
The price is a considerable jump from the $2.65 million the previous owner paid in 2013 and comes amid a flurry of sales in Melbourne’s CBD.
During the competitive auction earlier this month seven bidders vied for the site at 11 Heffernan Lane, before it was snapped up by a local buyer.
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It is the twelfth freestanding building to go under the hammer in the CBD this year – double the number that has been offered at the same time in 2017.
And the upward sales trend looks likely to continue, with property owners taking advantage of some of the strongest buyer conditions in Melbourne’s history, according to CBRE’s Josh Rutman, Max Ruttner, Alex Brierley and JJ Heng, who marketed the property in conjunction with Morley Commercial.
Heng attributes the booming CBD market to increased stock availability, as well as strong interest from foreign buyers.
“While the ultimate purchaser was a local investor, four of the seven bidders were of Asian background driving competition and value under competitive auction conditions” Heng says.
The auction at 11 Heffernan Lane was heavily attended.
“The continued interest from the international market for Melbourne CBD freehold buildings has played a significant role in helping our vendors achieve yields ranging from 2.5% to 3.5%.”
Experts are pointing to several unique factors in 2018, which are creating extremely strong buyer conditions.
This includes a surge in Melbourne sales volumes due to a rare period of generational change, with a large number of private family properties hitting the market after being passed on to younger family members.
Landlords have also been hit with significant increases in land tax in the past few years as a result of skyrocketing property values, and many are now moving to offload properties as they struggle with cash flow.
These factors come amid aggressive demand from Asian investors ahead of a long-expected restrictions on Chinese capital.
189 King St is the latest building in this pocket of Melbourne’s CBD to be listed for sale.
The next CBD freestanding building being offered to the market is 189 King St in Melbourne.
The two-level building is vacant but is centrally situated next to the corner of Bourke St and King St.
CBRE’s Retail Leasing Specialist Tan Thach says population increases are a major driver for retail activity, which is creating pent-up demand from both local and international Asian retailers to secure space in this pocket of the Melbourne CBD.
The CBRE team will sell the property via public auction on-site Friday June 8 at 12:30pm.
