A recent CBRE market review suggested a strong level of investor demand for Melbourne CBD investment properties priced under $10 million.
Erin Obliubek of CBRE Global Research and Consulting said the report highlighted seven transactions between $1 million and $10 million over the past three months.
“We have seen an uptick in activity in the $1 million to $10 million market over the past couple of months with circa $33 million having been invested across 10 recent transactions by a mix of both local and overseas investors,” she said.
An undisclosed buyer paid $5,999,000 for the Campari House building located in one of the CBD’s best known laneways at 21-25 Hardware Lane.
The property was auctioned in front of a crowd of over 200 people in late 2012 but failed to attract interest in excess of $5,500,000 on the day.
Selling agents Josh Rutman, Mark Wizel and Ed Wright of CBRE Melbourne City Sales handled the sale of the property on behalf of an overseas-based Australian expat who acquired the property in 2010.
“We have witnessed a clear level of heightened interest from private investors wanting to acquire properties in the Melbourne CBD in the first few months of 2013,” Mr Rutman said.
“Whilst this end of the Melbourne CBD market has performed quite well in comparison to other parts of the commercial property market post GFC, we feel that there is a distinct influx of buyers who are willing to pay premium prices to secure good quality Melbourne CBD assets.”
Mr Wizel said interest in Melbourne CBD investment assets was being underpinned by growth in the city’s permanent CBD population.
“Construction is already underway on 6,000 apartments in the CBD and Southbank, which will house more than 10,000 new residents within two years,” Mr Wizel said.
“With the Melbourne CBD boasting one of the fastest population growth rates, businesses like Campari are set to benefit from a continuous influx of regular patronage from office workers, tourists and permanent CBD residents.”