South Yarra’s attraction to investors and developers has been on show with a commercial building selling under the hammer for $7.7 million, at a remarkably sharp 2.47% yield.
Fitzroys’ Chris James and David Bourke sold 34 Garden Street on behalf of private owners who had held the property for 30 years.
A local private investor won out from a deep field of investors and developers. The sale price also reflected a strong land rate of $16,450 per sqm.
Zoned Commercial 1, the 900sqm showroom, warehouse and office building is on a 468sqm site just moments away from the Jam Factory and the hospitality and lifestyle amenity of famous Chapel Street. It is leased to Australia and New Zealand custom window furnishings supplier Lovelight.
Bourke said the strong enquiry reflected the growing interest from investors and developers in South Yarra.
“Inner-suburban commercial offices in highly accessible locations and surrounded by hospitality and lifestyle amenity are in huge demand at a time of flexible working arrangements,” Bourke said.
“Many workers are wanting to be closer to the office. With the neighbouring Richmond and Cremorne markets becoming ultra-competitive, more tenants are looking at South Yarra and its vibrant lifestyle offering as a home for their business, and investors and developers are taking note.”
“In this case, the property offered a great tenant in Lovelight, which attracted strong interest from investors and led to a remarkably sharp yield being achieved.
“Developers were encouraged by the favourable Commercial 1 and Chapel Street South Yarra Activity zoning that afforded huge development potential with a 27-metre height limit. The high land rate is consistent with sales of well-located sites in the booming Richmond and Cremorne markets.”
James said South Yarra is undergoing a transformational period that is bringing new retail, office and hospitality offerings.
Newmark Capital, Gurner and Qualitas are currently planning the $1.5 billion Jam Factory redevelopment, while Vicland recently completed the 11 Wilson Street office building, Goldfields is developing a new office tower at 627 Chapel Street, and US company Greystar is planning Australia’s biggest build-to-rent project in the suburb.
Dahua, Franzé and Spotlight are all developing apartment projects in the suburb too.
“This spate of development is seeing South Yarra regenerated as a commercial, lifestyle and residential destination in its own right,” James said.
He added that the suburb’s easy accessibility by car and all modes of public transport has further made it an attractive proposition for residents and businesses.