A corner hospitality freehold with a quality tenant has proven the ongoing pull of bricks-and mortar investments in Melbourne’s inner north, with investors from across Australia competing for the asset on the way to a strong sales result.
Fitzroys’ Chris Kombi and Ervin Niyaz sold 331-335 Lygon Street, Brunswick East for $3 million, on a tight 4% yield and high land rate of $9,772 per sqm. Private investors traded the asset.
The entirely renovated single-storey building of 290sqm is on a generous land area of 307sqm and has a commanding dual street frontage of 35.23m to the busy intersection.
Kombi said there was local and interstate interest in the asset, mostly from investors looking for a high-profile corner property in an inner-city location with strong capital growth potential.
“This was ultimately purchased as a passive set-and-forget investment, with a long lease to an established and recognised hospitality tenant, and which was fully renovated, therefore requiring no work,” Kombi said.
“The purchaser also recognised that this inner north location is rapidly transforming and gentrifying. There are several new mid- and high-rise apartment buildings being developed in the area, in addition to a number of projects completed in recent years, and factories in the side streets are being converted to trendy office spaces and warehouse living.”
Niyaz said this was another vote of confidence from the market in the safety of bricks and mortar in the current interest rate environment.
“Amid stock market and residential market volatility – and despite the higher interest rate environment – we’re still seeing investors pursue well-located commercial property assets with secure leases to high-quality tenants. That’s continuing to flow through into very competitive campaigns and strong sales results.”
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