A Malaysian Investor has paid a healthy $5 million on a tight 4.86 percent yield for a Burgundy Street, Heidelberg investment property.
A Malaysian Investor has paid a healthy $5 million on a tight 4.86 percent yield for a Burgundy Street, Heidelberg investment property with development upside, establishing a new land value record for the area of $11,655 a square metre.
The new single storey, 420 square metre retail building in the heart of the Burgundy Street retail precinct, was sold subject to a new lease to Chemist Warehouse returning $243,101 per annum, and with plans and a permit for the construction of 16 apartments over six levels above.
Savills Director CBD & Metropolitan Sales, Nick Peden, who brokered the 156 Burgundy Street deal with Associate Director, Jesse Radisich, said, with foundations already in place to support the approved project, the new development was ready to go.
“This was truly an incredibly rare opportunity in a fantastic location with the foundations for an apartment development already built – a massive cost saving - and income from a blue chip tenant during construction.
“Heidelberg, within easy reach of Melbourne’s CBD, has become increasingly popular over recent years with developers selling up to 90 percent of apartment projects before and during construction, and that success was undoubtedly a key driver of interest in this property,” Mr Peden said.
Mr Radisch said the Expressions of Interest campaign had predictably attracted numerous local and off-shore purchasers with the bulk of formal submissions coming from both local and Asian developers including those from China and Singapore as well as Malaysia.
“The transaction clearly demonstrated the increasing appeal of Melbourne’s inner suburban markets to Asia-based buyers wishing to invest in areas with strong population growth and the price reflected that,” Mr Radisich said.
He said the proposed development would take full advantage of what was an incomparable location, right in the middle of Heidelberg’s retail and entertainment precinct.