PRIME SOUTH YARRA RETAIL CORNER SETS TWO NEW RECORDS
169-175 Toorak Road, South Yarra
It is understood a new price record for an Australian online property auction has been set in Melbourne last Friday with the sale of 169-175 Toorak Rd South Yarra, which sold online for $13,150,000 on an incredibly tight fully leased initial yield of 2.2%. The vendor had only purchased the property in April 2016 for $7,880,000 clearing a massive 66% uplift in the space of four years. It is also understood the low 2.2% yield reflects a record low cap rate for metropolitan Melbourne (noting prices move inversely with yield).
The sale was handled by Emmetts agents Charles Emmett, Geoff Emmett, Andrew Milligan and Hung Pham. The property which is on the corner of Toorak Road and Yarra Street adjacent to the entrance to South Yarra Station, comprises a landholding of 613 sq m and is improved by four tudor-style retail buildings has a fully leased net income of $293,000 pa plus GST and outgoings.
Emmetts Managing Director Charles Emmett said: “the result speaks to the current levels of demand in Melbourne’s private commercial real estate investment market”.
“The Victorian Government’s snap lockdown decision was announced only 27 hours before the scheduled auction time. It was really unfortunate from the point of view that it was one of the most highly anticipated auctions of the year. The calibre of the property was one that would typically draw a 400-500 person crowd on a Friday afternoon, many of them investors and industry onlookers seeking to get a gauge of the market. We’d been anticipating there was a risk of a lockdown since earlier in the week and we’d consulted our client and consulted with our Auctioneer; Paul Tzamalis of the Auction Company, as to whether we should delay the auction or switch to an expression of interest format in the event of an announcement. Ultimately the decision was made fairly quickly to move online as only minutes after the announcement we had buyers calling us to ask how they could buy the property. We’d had over 200 enquiries throughout the course of marketing and the demand was clearly there. Educating some of the buyers about the online registration process and how an online process would work was a bit of a process but ultimately there weren’t any buyers who said they wouldn’t participate. In the end we had 22 registered bidders lined up on Zoom. Whilst lacking in the theatre of a public on site auction that is engrained into the DNA of the Melbourne market, a Zoom format with 22 other bidders staring back at each other, all of whom have actually registered to bid on the day, also has its advantages to setting a highly competitive selling process.”
“Bidding started at $10 million with multiple parties bidding up mostly in $100 thousand dollar increments. The bidders were comprised of a mix of developers and investors. Whilst the purchaser intends to develop the property, the second and third under-bidders were both passive investors.
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