Property leased to Mitre 10 in Melbourne's Sorrento auctioned $6 million above reserve price
A site leased to Mitre 10 in Melbourne's Sorrento for 35 years recently sold for $11.465 million, nearly $6 million above its reserve price after furious bidding.
The owners of 80-98 Ocean Beach Road property in the popular holiday spot had set the reserve at $5.5 million, but competition amongst 10 bidders pushed the result to more than double that mark.
The yield works out to just 0.39 percent, one of the tightest yields ever recorded in Victoria.
A spokesperson for selling agent CBRE said no one saw the result coming, and it's finish was just as unusual it appears.
“We knew that there was some X-factor potential with this property due to its location and 40+ metre frontage to the main street, but the auction result exceeded expectations beyond comprehension,” the spokesperson said.
Selling agent CBRE defended its handling of a high-profile commercial property auction in Sorrento on Victoria's Mornington Peninsula, after the bidding was restarted at the end of the auction.
A number of those present told The Australian Financial Review the property had already sold under the hammer before a dispute arose; the property was subsequently put back on the market, and bidding resumed. The original winning bidder lost out.
The property comprises a 2,601 sqm block of land with 1,217 sqm of improvements, with street frontage on Sorrento’s main street. It has leases in place until at least 2020 to Mitre 10 and O’Brien’s Removals and Storage, but is being touted as a future development site.
Three of the bidders were Chinese developers and investors, but the winning bid came from a local investor, the spokesperson added.
“Whilst the property is potentially not earmarked for an overly large-scale development, there was a ground swell of buyer interest from parties with property in their blood wanting to deliver a project in their own backyard."
It was 1946 when Jack Womersley bought interests in a local Frankston timber mill which dated back to 1922.
In 1959, Jack became one of eight founding members of Mitre 10, before handing the reigns to sons Geoff and Fred.
The business has been run by Jack's grandson's Stuart, Peter and Scott Womersley.
The family purchased Sorrento Timber and Hardware in 2004 and the Chelsea Heights Mitre 10 store in 2007.
A former Mitre 10 site on Sydney's northern beaches sold earlier this month.
The nearby Continental Hotel at Sorrento is under offer, listed by the Di Pietro family with $15 million expectations last March.