Browse all categories | Subscribe My Account | Logout
Browse all categories
< Back

Cremorne office to test yields in hot market

Finance Markets / Latest Activity


Nov 25 2017

Add to Favorites

Share this Article:

The sale of a fully-leased Cremorne office building will test the market as yields plummet in the wake of a new stock shortage driving increased investor competition for every available asset, according to Teska Carson Director, Adrian Boutsakis. 

The near new 44 Gwynne Street building offers 1000 square metres of office space over five levels and 14 secure carparks on a 326 square metre site and is fully leased to three tenants returning $431,882 per annum plus outgoings and GST. 

Mr Boutsakis, who is managing the Expressions of Interest campaign with colleague Matthew Feld, said the very strong tenant demand for city fringe office space around Cremorne and Richmond had intensified the interest of investors despite some of the lowest yields on record.

``The level of demand for office space in Richmond and Cremorne is higher than at any time since the GFC and arguably the strongest it has ever been.  That’s particularly the case for new office buildings and fully-leased buildings and why we may well see a benchmark result for this property,’’ Mr Boutsakis said.

Mr Feld said yields in Richmond and Cremorne had continued to tighten over the last 12 months to around 5.75 per cent, but with vacancy at 2 per cent or lower and an extreme shortage of properties available for purchase at a time that demand remains at an historical high, recent transactions had fallen below that mark.

``This is Melbourne’s hottest city fringe market and recent sales bear that out with several properties having sold well below 5.75 per cent and one selling below an extraordinary 4 per cent. It is really vendor’s heaven at the moment,’’ Mr Feld said.   

Recent sales in Richmond and Cremorne include:

•620 Church Street,  $23.3 million, 5.1% yield;

•630 Church Street,  $23.5 million, 5.1%;

•Building 8, 658 Church Street, $44.65 million, 4.99% yield; and,

•71-73 Balmain Street, Cremorne, $7 million, 3.7% yield.

Mr Boutsakis said the 2015 building presented in immaculate condition throughout with flexible, self-contained floor plates which all benefit from natural light and sun-filled balconies - the 4th level having a larger terrace style area – and city views. 

He said the close proximity to Swan Street, Church Street, Punt Road and the CBD, parking, and easy access via public transport and major arterial routes were factors that would continue to drive strong tenant demand within the precinct.

The property is expected to fetch north of $7.5 million when Expressions of Interest close on Wednesday, December 6 at 3pm.


SOURCE: Feature Article


You may also like...

Load More


Login into your MP Report account

Forgot my password

Sign up to the MP Report

Creating an account with MP Report allows you to save articles and update your preferences to filter the content based on your interests and what content you would like to receive from us via our email alerts and newsletter.