South Melbourne office listed with $18 million plus hopes

A South Melbourne office building has been listed with price expectations of $18 million plus.

The 31 Market Street, South Melbourne property comprises a fully leased, three level, building with undercover parking for 41 cars.

It has a weighted average lease expiry (WALE) of four and a half years to a range of ASX listed, national, and government funded tenants, returning $1,055,000 per annum.

The 2565 square metre building sits on an 1150 square metre site with the corner situation has been recently refurbished.

The property is being marketed by Clinton Baxter, Nick Peden and Benson Zhou of Savills in conjunction with Danny Clark, Andrew Hansen and George Burbury of Knight Frank.

Baxter said fringe properties were now very much on the agenda of investors as opportunities in CBDs dried up.

A record $1.39 billion was spent on Melbourne fringe property in 2016, up 31% over the previous year, with yields at an average 6.63% compared to CBD yields at 5.75%, according to Savills Research.

Foreign investors dominated sales with 84% of purchases.

“CBD investment markets have been hot over the last four years and inevitably that has led to a shortage of stock and record low yields,’’ Baxter said.

“At the same time a pick-up in CBD leasing has seen vacancy tighten and rents rise.”