A predominantly leased office building in Surrey Hills has sold for $12 million as investors relentlessly pursue high-performing commercial assets in Melbourne’s inner- eastern suburbs.
The modern three-level property at 917 Riversdale Road was built circa 2012 after the site was acquired by the vendor in 2007.
Colliers International’s Andrew Ryan and Peter Bremner brokered the deal at a building rate of $5,733 per square metre and a passing yield of 5.38 per cent, saying the result was indicative of a “seller’s market”.
“The commercial investment market is extremely tight, with investor demand outweighing the investment opportunities available,” Mr Ryan said.
“The purchaser had been looking to reinvest since selling their investment property in April last year and had found it difficult to do so up to this point.
“In the current market, opportunistic purchasers like this are becoming more common and happy to buy investment-grade buildings in an off-market capacity.”
The building has a net lettable area of 2,093 square metres and is 78 per cent leased. The layout is split into five tenancies, four of which are occupied by Blackmores, ACS Financial, Australian Money Planners and Ingram Micro.
“The purchaser is hopeful of having it fully leased either at settlement or soon thereafter, which will then reflect a 6.56 per cent reversionary yield on the sale price,” Mr Ryan said.
“Being a relatively new building, it requires no CAPEX in the short to medium term which, combined with the high likelihood of it being fully let by the time it settles, should prove to be a very savvy and smart investment.”
The office building has secure on-grade and basement-level parking, lift access to all levels and toilet and kitchenette facilities on all floors.