Chinatown laneway building sells after 1229 days

It has taken 1229 days and a third agent to deliver a windfall to the seller of a long-held laneway block in Chinatown.

Home to a Chinese Sichuan restaurant, Japanese ramen eatery and a basement late-night bar, 26 Corrs Lane fetched a strong $6.85 million at auction on June 13.

The vendor had paid $2.5 million for the property in 2005, giving a hefty gain of $4.35 million on the investment.

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Sales records show the property was listed back in 2016 for private sale and was also listed by another agent for tender sale. But it remained unsold until CBRE took over the listing in May and found several potential buyers in a four-week auction campaign.

26 Corrs Lane, Melbourne sold strongly to a local investor.

“The result represents a good 3.29 per cent yield for the property with a very competitive auction with four bidders,” CBRE listing agent Alex Brierley says.

“A couple of buyers missed out because they waited but the bidding went ahead of them.”

He noted that similar laneway blocks close to Chinatown were tightly held.

The auction crowd packed the laneway.

The opening bid for 26 Corrs Lane was $5.25 million and the result was well above the reserve, which was in the low $6 million range, Brierley says.

The building has a net income of around $225,000 a year and, despite needing some improvement works, attracted plenty of investor interest.

The buyer is a local investor who will have value-add opportunities with multiple income streams and flexible open floor spaces.

The main tenant is Fukuryu Ramen which takes up two levels and which is on a monthly lease, while Sichuan House has a five-year tenancy. The basement bar is on four-year lease.

One of the restaurants in the building.

It has a 16.4m frontage and serves as a key pedestrian thoroughfare connecting Lonsdale St to Chinatown.

The 296sqm block offers a total of 956sq m of floor space with a small basement and three upper levels.

Chinatown’s most successful laneway restaurants include Flower Drum, Hutong Dumplings and Supper Inn.

The most recent laneway sale was 12-14 McKillop St which fetched $14.5 million last October. A local investor bought the 1920s-built 361sq m block with five levels and a 22m frontage.

This article from Leader Newspapers originally appeared as “Chinatown laneway: vendor dines out with windfall auction result”.