South Melbourne Site with Development Upside Snapped Up for $32m

Melbourne city fringe commercial market continue to surge thanks to low vacancy and increasing demand from tenants seeking city fringe locations.

A sizeable 2,765sq m island site with mixed-use zoning was snapped up by a local investor for $32.01 million on a tight 4.78 per cent yield.

The five-storey office property, located at 210 Kings Way and once owned by former rich lister "Diamond Joe" Gutnick, returns approximately $1.5 million a year.

Lemon Baxter’s Chris Curtain, Paul O’Sullivan and Justin Clinch, who brokered the deal, said the sale is another example of well leased offices with development potential attractive to the Investor and Developer market.

“The property represents one of the only large development opportunities remaining in the whole of South Melbourne,” Curtain said.

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Lemon Baxter fielded in excess of 150 enquires for the building, with six bidders ultimately vying for the site.

Last week, Lemon Baxter sold 16-22 Eastern Road a 391sq m commercial property in South Melbourne for $5.2 million representing a 4.8 per cent yield.

The 210 Kings Way transaction follows the recent South Melbourne sale of 142 Dorcas Street to the Victorian Government for $23 million, 200 Wells Street sold to Steller Group for $23.4 million, and 256 City Road for $34.5 million to Grocon.