Melbourne Theosophical Society building bought by Chinese investor: Savills

A Chinese investor has snapped up a Melbourne CBD property, best known as the home of the Melbourne Theosophical Society, for an undisclosed sum though the selling agents from Savills said the yield was below 1 percent.

The 124-130 Russell Street building was fully leased, with short-term tenancies in place. It was expected to fetch around $20 million when it was listed in June.

The Society held the building for 45 years. MTS paid $180,000 for the property in 1972.

The recent transaction was through Nick Peden, Clinton Baxter and Benson Zhou of Savills. The transaction manager was David O’Callaghan of O’Callaghan Commercial. 

Peden said the property attracted strong investor and developer demand, with buyers flying in from interstate, China and South-East Asia to view the property. 

“Many local buyers were extremely keen to purchase this property, but they simply couldn’t match the fire-power of cashed-up private investors from Asia with the leading contenders in this instance being from Malaysia and China,” he said.

“We received intense interest in this asset from many potential buyers with the key attractions being the property’s super-prime position directly opposite the QT Hotel, its wide retail exposure, proximity to Melbourne’s retail core, and various opportunities to add-value once MTS relocates from the premises,” he said.

The property was sold following an expressions of interest campaign. 

Peden added that strategic east-end CBD properties are well positioned to profit from the apartment and population boom in central Melbourne, which will also lead to greater retail spending throughout the city in coming years.

The 1,654 square metre, five level, retail and office building sits on a 519 sqm site, zoned Capital City, with frontages to Russell Street and Melbourne Place.

It made a passing net income of nearly $159,566 per annum.

Baxter said pent-up demand for CBD properties in the $10-$30 million price bracket is quite pronounced with a tsunami of capital from Asia endeavouring to secure prime properties throughout the Melbourne commercial market.