South Yarra prime corner brings $13m
The unidentified purchaser fought off six other parties at last week's auction, paying $12.825 million for the 332-square-metre site.
The strong sale resulted in a tight yield of just 4.6 per cent, which agents say reflects the intense competition for properties leased to prime tenants such as banks.
"NAB has been in the spot since 1951," said Fitzroys director David Bourke.
"It's also very much a landmark corner." The campaign was run in conjunction with fellow agent Charles Emmett.
The NAB branch is entering the second year of its latest five-year lease, while the office space on the second level is leased to another company on terms that end next year.
The property at 600 Chapel Street was bought from NAB for $3.585 million in 1997 in an apparent lease-back arrangement.
Fitzroys leasing executive Harry Curtis said other banks, particularly Bank Melbourne and CBA were expanding their branch networks.
Fitzroys recently negotiated a lease with the Bank of Melbourne for 701 Glenferrie Road in Hawthorn and a deal with Citibank at 610-612 Burke Road in Camberwell.
Frequently Asked Questions about this Article…
A Melbourne private investor paid $12.825 million at auction for the prominent 332-square-metre South Yarra corner site. The purchaser was unidentified and beat six other parties at the auction.
The sale produced a tight yield of just 4.6%. According to the agents, that low yield reflects intense competition for properties leased to prime tenants such as major banks.
National Australia Bank (NAB) has occupied the South Yarra branch since 1951. The NAB branch is entering the second year of its latest five-year lease; the office on the second level is leased to another company on terms that end next year.
Yes. The property at 600 Chapel Street was bought from NAB for $3.585 million in 1997 in what was described as an apparent lease-back arrangement.
Agents say intense competition for bank-leased properties is driven by the perceived security and appeal of prime tenants. The article also notes that some banks, including Bank of Melbourne and CBA, are expanding their branch networks, which supports demand for branch locations.
The campaign was run by Fitzroys in conjunction with Charles Emmett. Fitzroys personnel quoted in the article include director David Bourke and leasing executive Harry Curtis. Fitzroys recently negotiated a lease with the Bank of Melbourne at 701 Glenferrie Road in Hawthorn and a deal with Citibank at 610-612 Burke Road in Camberwell.
The unidentified purchaser beat six other parties at last week's auction, demonstrating strong competition for the landmark corner site.
The sale highlights that prime, bank‑leased corner sites can attract strong competition and produce low (tight) yields. Key factors investors should watch—based on the article—are tenant quality (major banks), lease length (the NAB lease is mid-term), and upcoming lease expiries (the second-level office lease ends next year).
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