King Street investor outmanoeuvres Grollos
A Chinese investor has outmanoeuvred the Grollos - the joint owners of Melbourne’s Rialto Tower - to snare a neighbouring King Street property for $11.98 million.
The five level office building at 26-32 King Street changed hands on an extremely tight yield of 2.9 per cent in a deal negotiated by Savills Australia’s Clinton Baxter, Ming Li and Jesse Radisich.
“The scarcity of Melbourne CBD properties on the market, particularly below $20 million, is apparent among active buyers, resulting in significant pent-up demand,” Mr Baxter said.
The Grollos’ interest was thought to be motivated by securing views for tenants in the premium Rialto Tower, an asset they jointly own with a Kuwaiti government investment vehicle.
The 1200 square metre building has redevelopment potential.
It is leased to multiple tenants and a 7-Eleven shop on the ground floor which, combined, return net rental income of $352,000 per annum.
The property last traded for $5.1 million at auction in 2010, meaning it added 135 per cent in value during the vendor’s eight years of ownership.
“King Street has a lot of upside,” Mr Baxter said.
Rapidly escalating growth in the city’s west end has seen a corresponding increase in land and capital values as multiple new apartments, hotels and office buildings are added.
The property also abuts rich lister Jonathan Hallinan’s 30-level hotel development which he recently sold to InterGlobe from India.
Most Viewed in Business
Please explain
Our weekly podcast giving you insight into the stories that drive the nation.
Listen now