The prime retail building located on 136 Bourke Street in Melbourne sold for US$2,478,000 and attracted seven serious bidders to the auction.

The building is the home of fast expanding international clothing chain Lululemon Athletica and was sold by Mark Wizel and Josh Rutman from the CB Richard Ellis City Sales division.

Rutman said the strength of the tenancy covenant was a significant draw card for buyers as was the prime East End CBD location. The dual-level property was put 'on' the market during the auction without referral due to the strength of the bidding.

"This is yet another example of strong prices being paid for sub US$5 million retail properties in the Melbourne CBD, and we expect the strength in this sector to be maintained moving forward due to the basic supply demand imbalance for assets of this nature," Rutman said.

The Canadian-based Lululemon Athletica is a high-end maker of exercise clothing, which has grown to ten Australian franchise stores and four showrooms since 2004. The group recently increased its investment in its Australian partner, New Harbour Yoga as part of its plan to grow its Australian network to between 20 and 25 stores in Australia and New Zealand.

"Lululemon's established market presence, its international foundations and stated Australian expansion plans made 136 Bourke Street a highly appealing low risk investment opportunity," Rutman said. "Lululemon occupies the building on a new four year lease which returns approximately US$139,200 net per annum with fixed 4 percent annual increases."