Laneway building nets $2.3 m

A three level building in one of Melbourne’s vital laneways at 13-15 Hardware Street sold at auction on Friday for $2.3 million representing a yield to the buyer of only 3.4% on the current rental income.

Kliger Wood Real Estate offered the property located at the Bourke Street end of Hardware Street that is more readily identified as the home of Auski and Jeremy’s restaurant.

Purchased by a private investor the building has three three levels and a total building area of 420 sqm, with a 10.7m frontage. Separate access is provided from the street to the upper levels.

The property provides an opportunity to realise significant rental growth, given the current base income is in the order of $85,000 net, over all three levels.

Kliger Wood auctioneer Eugene Wood said “With the relatively short term nature of both the existing leases the property afforded the opportunity to secure a position in the street plus the potential to upgrade the upper levels in particular.

“With the relevant permits alternative uses for the upper floors including offices or residential conversion could be countenanced. “Before the auction our expectation was that the building would attract bids in the region of $2 million”, Mr Wood said.

Reprinted with permission. The Australian Property Review. http://www.apr.com.au