The Blocktagon South Yarra cafe sells to investor
An investor has snapped up the cafe premises on the ground floor of The Blocktagon South Yarra redevelopment.
They paid $1.11 million for the space, currently leased to Mister Zen. It was bought on a 4.3% yield.
The new owner intends to hold property as a long-term investment.
Fitzroys agents James Lockwood and Chris Kombi sold the 5 Commercial Road premises.
Lockwood said they are already in the hospitality industry, with that experience providing them with further confidence investing in this type of asset.
“Interest came from local and offshore parties due to the quality of the tenant, which has been hugely successful in catering to the young and vibrant demographic of area, while the incredibly rare chance to own part of an iconic Melbourne property was also a drawcard,” Lockwood said.
He said the highly exposed property is in a vibrant location close to Punt Road and adjacent to the Alfred Hospital and Fawkner Park, and near tenants that include Caltex, Guzman y Gomez, Officeworks, Volkswagon, and L’Hotel Gitan.
The café itself was designed, constructed and named by the participating teams of the season as part of a challenge on the 2015 series of The Block.
Under the direction of architect Julian Brenchley, the interior was created with combinations of concrete and timber and includes angular ceilings with negative spacing, feature light bulbs throughout, and a separate lighting system design imported from Italy, while its coffee and health-oriented menu have created a loyal following.
The 135 sqm cafe includes an architecturally designed courtyard of a further 195 sqm.
The space yields $48,801 per annum. Mister Zen currently holds a 4 x 4 x 4 year lease.
It was the first time the commercial aspect of the property had been up for sale since it last traded for $975,000 in 2017.