Local investor trumps international buyers for prime Bourke Street property

16 May 2018

A Melbourne CBD restaurant has sold after an extremely competitive expressions-of-interest campaign.

The two-level retail asset, located in the city’s east end at 72-74 Bourke Street, has long been renowned as the home of Denis Lucey’s Bottega and has been sold to a local investor on a record low yield below 3.0 percent.

Savills Australia’s Clinton Baxter, Nick Peden and Benson Zhou brokered the deal, saying the sale price highlighted the continued demand for significant and premium CBD freehold properties.

“The scarcity of Melbourne CBD properties on the market, particularly below $10 million, is apparent among active buyers, resulting in significant pent-up demand,” Mr Baxter said.

Bottega has been operating out of a prize two-level building since 2002, and has recently extended its lease to ensure long-term tenure, with a current rental of $211,940 per annum.

The property has a land area of 198sq m with a frontage eight metres.

Mr Baxter said the property received offers from both local and off-shore buyers.

“More than 250 parties expressed their interest towards the property, with 15 formal offers being lodged,” he said.

“Numerous international bidders competed for the property, only to be out-muscled by a local investor with existing CBD property holdings.”

Mr Baxter said there were several disappointed under-bidders who missed out on the unique opportunity to secure such a property in the east end of the CBD.

“Melbourne is now firmly on the global investment stage, money is flooding in from offshore, and this sale indicates local investors can compete successfully against Asian buyers, provided that they accept that a premium price is required to secure CBD assets,” he said.

Mr Peden said Savills Australia was anticipating an active 2018 due to increased buyer demand for Melbourne commercial assets, the strength of the CBD market, and the city’s increasing population growth.

“The buyer was attracted to the building’s prime CBD location and long-term tenancy, as well as the prospect of strong rental growth as the CBD continues its extraordinary evolution,” he said.

 
 

Key Contacts

Clinton Baxter

Clinton Baxter

State Director - VIC
CBD and Metropolitan Sales

Savills Melbourne (150 Collins Street)

+61 (0) 3 8686 8021

 

Nick Peden

Nick Peden

Director
CBD and Metropolitan Sales

Savills Melbourne (150 Collins Street)

+61 (0) 3 8686 8011