Cremorne office to test yields in hot market

Cremorne office to test yields in hot market
Cremorne office to test yields in hot market

The sale of a fully-leased Cremorne office building will test the market as yields plummet in the wake of a new stock shortage driving increased investor competition for every available asset, according to Teska Carson Director, Adrian Boutsakis.  

The near new, 2015 built property at 44 Gwynne Street is expected to fetch north of $7.5 million.

The office block has 1000 square metres of office space over five levels and 14 secure carparks on a 326 square metre site.

It is fully leased to three tenants returning $431,882 per annum plus outgoings and GST. 

Boutsakis, who is marketing the building with Matthew Feld, said the very strong tenant demand for city fringe office space around Cremorne and Richmond had intensified the interest of investors despite some of the lowest yields on record.

"The level of demand for office space in Richmond and Cremorne is higher than at any time since the GFC and arguably the strongest it has ever been," Boutaskis said.

"That’s particularly the case for new office buildings and fully-leased buildings and why we may well see a benchmark result for this property,’’ Boutsakis said.

Feld said yields in Richmond and Cremorne had continued to tighten over the last 12 months to around 5.75 per cent, but with vacancy at 2 per cent or lower and an extreme shortage of properties available for purchase at a time that demand remains at an historical high, recent transactions had fallen below that mark.

"This is Melbourne’s hottest city fringe market and recent sales bear that out with several properties having sold well below 5.75 per cent and one selling below an extraordinary 4 per cent.

"It is really vendor’s heaven at the moment,’’ Feld said.    

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

Tags: 
Commercial Listing Cremorne

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