Savills News

Boutique office suite sells for $1.6m following renewed market confidence

A high quality boutique office suite located in Melbourne’s tightly held legal precinct has transacted to an overseas investor for $1.6 million. 

A high quality boutique office suite located in Melbourne’s tightly held legal precinct has transacted to an overseas investor for $1.6 million.

Achieving a tight yield of 4.99 percent, Suite 101, 620 Bourke Street was sold by Benson Zhou, Tim Carr, Jesse Radisich, and Glenn Ye of Savills.

The deal was struck following a high level of enquiry from investors who were drawn to the strong tenant covenant and opportunity for capital growth.

Director of CBD and Metropolitan Sales at Savills, Benson Zhou, said the sale highlights the current demand for this asset class from offshore buyers.

“The buyer was a Malaysian investor who acted extremely quickly, paying the asking price with quick settlement, 

“Offshore investment into Melbourne remains incredibly strong and shows no signs of slowing down,” Mr Zhou said.

The inner city investment is currently occupied by a high quality legal tenant, secured on a 3 year lease with a 3 year option from February 2018.

Kathy Jones & Associates occupy the 179sq m suite at a total estimated passing net income of $79,915 per annum.

Executive of CBD and Metropolitan Sales at Savills, Tim Carr, said the sale reflects the confidence that is returning to the market off the back of the recent federal election and interest rate cuts.

“We have certainly noticed a renewed confidence from investors and expect that this will only strengthen over the coming months,” Mr Carr said.

The sale represents a capital value of $8,939 per square metre.

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