Strong performance for investment opportunities in Melbourne’s central business district is forecast for this year with stock surpassing demand says a CB Richard Ellis review.

CBRE Senior Manager Sebastian Drapac said the month of December had been the strongest in over three years for the firm’s City Sales division, with a series of high profile deals negotiated across all sectors of the market.

“There is a deep buyer pool and this has been fueling exceptional results for properties in the $1 million to $20 million price bracket,” Drapac said.
“Examples include the recent $12,040,000 sale of 193 Elizabeth Street, with the property acquired at auction by a local investor on a tight yield of just 4.6 percent.”

CBRE Senior Associate Director Mark Wizel said strong buyer demand was evident at both the lower and upper end of the market. This has been evidenced by the strong sales result for 193 Elizabeth and the results achieved on smaller properties such as a ground floor retail tenancy at 136 Bourke Street which had sold at public auction for $2,478,000 in December.

A national investor outbid six other parties to secure the Bourke Street property. Wizel also pointed to the sale of 12-14 McKillop Street which recently transacted to a private Melbourne investor for $4,300,000, reflecting a yield of 5.29 percent.

Another significant deal was the $9,003,000 sale to a private Melbourne investor of 15- 17 Queen Street. “One of best tests for a market is to look at the consistency at which different levels within that market are performing and it is clear that all levels of the Melbourne CBD market are performing very well,” Wizel said.

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