CBD values surge rolls into King Street

A Singaporean investor has snapped up the Hanabishi restaurant on King Street, Melbourne off-market, just days after its neighbour sold at auction.

The double-storey building which houses the Japanese restaurant at 187 King Street fetched $4.88 million, reflecting a yield of 3.32 per cent, a building rate of $17,777 a square metre and a land price of $26,143 a sq m.

The vendors purchased the 275 square metre building in 1999 for $650,000. They approached CBRE agents to market their property after the auction next door.

Seven bidders competed fiercely for No.189 which sold under the hammer for $5.31 million. It is believed one of the under-bidders purchased Hanabishi.

CBRE agent Josh Rutman, who managed the deal with Alex Brierley, Max Ruttner and JJ Heng, said, “The sale reflects a major shift in capital values across the western end of the Melbourne CBD.”

“Traditionally, building rates for freehold buildings on King Street have transacted between $8000 and $10,000 a sq m. These sales represent a building rate escalation of more than 68 per cent in the past 24 months,” Mr Rutman said.

More than $3 billion of commercial, hotel and apartment projects are in the pipeline for the sleepy west end strip, including Lorenz Grollo’s consolidation of the whole block around the Rialto for the new mixed-use King Street precinct.