Investor pockets 287% return for Bourke House

Melbourne building Bourke House has sold for more than $33 million.

A Melbourne investor has pocketed a 287% return in just three years on Melbourne CBD building Bourke House, after selling the property to a Chinese buyer.

The art deco building on the corner of Bourke and Russell streets sold for less than $12 million in 2014, but sold on Wednesday for more than $33 million – almost three times its price from three years ago.

The six-level building was previously owned by the Darrell Lea chocolate family and has been refurbished a number of times.

A new Chinese buyer won out at auction, placing the highest of 13 bids to buy his first Australian property.

CBRE’s Lewis Tong, who sold the property with Josh Rutman, Mark Wizel and Gross Waddell’s Raoul Salter, Michael Gross and Jonathan McCormack, says foreign investors remain eager to get their hands on Australian CBD stock.

“On a world scale investors still see Melbourne as being good value, especially when you can secure a prominent freehold corner on a famous street for under $30 million,” Tong says.

“In most other major cities this would only buy a strata title or secondary asset.”

The $33 million-plus sale prices represented a 4% yield and equated to a land rate of $88,000 per square metre, which CBRE says is a record CBD record.