Melbourne’s oldest pub sold in $92m deal
Another wealthy Melbourne family has taken advantage of soaring prices for top commercial assets, with Morry Schwartz and his family selling a hotel and historic pub for close to $100 million combined.
The total sale price was well above expectations of about $8 million for the two CBD buildings with yields at eyebrow-raising levels.
The buyer of the 65-room Adina Hotel at 88 Flinders St is understood to be Melbourne investor Yong Quek of investment manager PrimeValue who outbid Asian-based hoteliers and interstate investors at a yield of less than 4 %.
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The oldest pub in Melbourne, the Duke of Wellington at 2 Russell Street, and a nine-level office tower on the same block sold for a yield of less than 3.5 per cent. The buyer was a private family represented by Charter Keck Cramer.
The deals were handled by CBRE Melbourne Middle markets agents Josh Rutman, Mark Wizel, Lewis Tong and Kiran Pillai in conjunction with CBRE Hotels agents Rob Cross and Scott Callow. More than 35 bids were received on the properties.
Melbourne publisher and property developer Schwartz said top prices were achievable when assets were properly positioned to the market.
The Adina Hotel at 88 Flinders St in the Melbourne CBD.
“There is clearly a window for generational property owners to consider offloading their assets while the market is showing some very strong signs,” Schwartz says.
Schwartz last month said he was out of the “toppy” property market and did not want to be in the market if it were to turn down, according to media reports.
The deal follows the Myer family’s sale of a seven-level office building at 312 St Kilda Rd for about $75 million to the private family office of Singaporean Tong Eng Group’s managing director, Teo Tong Lim.
Earlier this year the Besen family sold its quarter stake in Melbourne’s Highpoint Shopping Centre to a GPT Group fund for $680 million. The Reserve Bank this week warned of the risk of a “sharp correction” to commercial property prices if interest rates rose or sentiment changed.
CBRE’s Wizel and Rutman says there is “clearly some nervousness” in the market from investors and their financiers, but quality properties are attracting high levels of interest and “fresh” Asian capital.
A nearby multi-storey car park and office at 114 Flinders St sold to Hong Kong investment group HK Realway on a 5.13% yield in May, while Singapore’s Lian Beng Group sold an office building at 247 Collins St at a 4.2% yield in April.
This article originally appeared on www.theaustralian.com.au/property.
