Melbourne car park sells to Malaysian investor on record 6.4% yield

A Malaysian-investor has paid $6 million for a car park on Flinders Lane in the Melbourne CBD.

There were 14 separate offers to purchase lodged at the close of the expressions of interest campaign with the sales price well in excess of the vendor’s expectations.

The sale on a yield of 6.4% comes soon after the Victorian state government announced it would significantly expand and increase its levy on car parks in Melbourne’s CBD.

The levy has increased 37% from $950 per year to $1300 per year and will now include short-term parking-bays for the first time.

The costs are expected to be passed on to car park users, equating to around $1 per day extra per car space.

The car park at  the base of the Katherine Square office building at 517-537 Flinders Lane comprises  106 bays on 99 individual titles and is managed by Wilson Parking on a lease term expiring in May 2014.

It brings in net income of around $385,667 per annum.

The sale price equates to $56,600 per car space.

The sale was negotiated by Clinton Baxter and Nick Peden from Savills, who said the property attracted "exceptionally strong interest from numerous local, interstate, and offshore investors, with many competitive offers being received".

Baxter said the 6.4% yield was a record for the Melbourne CBD.

The vendor was a local investor.