The commercial site, located at 9 Montrose Street, is occupied by Crossfit Gym, with a total rental income of $75,000 per annum.
Savills Australia agents Clinton Baxter, Jesse Radisich, and Glenn Ye negotiated the deal, achieving an impressively low yield of 1.8%, as well as an extremely high land rate of $8,500 per square metre.
“9 Montrose St. is within walking distance of Swinburne University, Senior Secondary College, and Auburn Train Station,” said Mr Baxter. “It’s permit-approved with stunning Rothelowman architectural plans for a 9-level apartment building comprising 34 units.”
Pace CEO Shane Wilkinson, famous for his development of St. Kilda’s landmark ‘Lego’ tower, said he plans to use the site’s flexible zoning to develop it into a high-end boutique office building.
“The timing is right for us to take advantage of the record low commercial vacancy throughout the inner eastern suburbs,” said Mr Wilkinson. “With the abundance of local amenity surrounding the property, we are confident that a new office project will be very well received by the market.”
Mr Baxter added that market development sites had “roared back to life” over the last two months after a “period of stagnancy.”
“With local and offshore developers snapping up sites and competing aggressively for prime real estate, clearly the looming shortfall in construction activity coupled with ongoing population growth is creating a perfect scenario for developers over the next 1-3 years.”
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