Retail sells above expectations
The Donati's Fine Meats building on Lygon Street sold at auction for $2.89 million. Photo: Tanya Ingrisciano
QUALITY retail assets are selling well despite weakening tenant demand and low levels of consumer confidence, agents maintain.
The home of Donati's Fine Meats at 402 Lygon Street sold under the hammer late last week in front of a 60-strong crowd for $2.89 million.
The sale of the two-storey building on a 75-square-metre site set a record for the strip, netting the vendor $38,533 per sq m and a tight yield of 2.31 per cent, Colliers International selling agents Jeremy Gruzewski and Tom Noonan said.
The property sold to a high net-worth individual as a medium-term investment.
Donati's was only the third commercial premises to be put up for sale in Lygon Street in the past two years - making the retail strip one of the most tightly held in Melbourne.
''The secondary market is being hit more,'' Mr Noonan said. ''Quality retail assets are continuing to perform well.''
Three recent sales in Prahran highlighted the fact high-profile sites were ''driving purchasing decisions at the moment'', another Colliers agent, Ted Dwyer, said.
In the past four weeks:
■ A 130-square-metre property at 268 High Street tenanted by Zimari Restaurant was sold to a private investor for $850,000.
■ Another in neighbouring Chapel Street, No. 252, tenanted by Tony Bianco sold after auction for $2.25 million to an international investor.
■ And a three-year-old architecturally designed office block at 40 Errol Street in the Hawksburn Village area was bought by an owner-occupier for $2.5 million.
Savills directors Nick Peden and Clinton Baxter said a Melbourne-based private investor paid $1.9 million on a passing yield of 6.15 per cent for a strata retail premise in Melbourne's CBD.
The 173 sq m ground floor Shop 1 at 50 Bourke Street was leased for $117,020 a year net to long-term tenant Cafe on Bourke until September 2016 with a five-year option.
Located at the top end of Bourke Street, it's surrounded by some of Melbourne's best bars and restaurants including Grossi Florentino, Gingerboy, Pellegrini's and The European. ''Despite widespread commentary about a tough market, we were able to sell the property within 14 days of placing it on the market, at the vendor's price, with minimal marketing expenditure,'' Mr Peden said.
It was Savills' third CBD retail sale in the past few weeks, he said.
Out west in Williamstown, Fitzroys Associate James Gregson sold a local 19th-century landmark, 82-84 Ferguson Street, for $2.5 million.
The ornate property was purchased by local real estate agent Wayne Elly, owner of Greg Hocking Elly Partners.