A private Melbourne investor has paid $2.38 million to acquire an Art Deco-inspired former bank building on Oakleigh’s Eaton Mall in south-east Melbourne.
The solid brick building sold under the hammer on December 7 with a large crowd in attendance and exceeded Crabtrees selling agent Mathew Marenko’s expectation of offers in the region of $2 million.
The sale price represents an indicative return of only 3.8% – reflecting the ‘landmark’ status of the building on the trendy eating strip – earlier the year a Lygon butcher shop premises sold for $2.89 million on a yield of just 2.3% and well above pre-auction price expectations.
“This is a building of substance reflected in its original construction for a leading Australian bank and it sits on one of the best and most highly exposed corners in the Oakleigh shopping precinct," says Marenko.
Eaton Mall is open both day and night, with a mix of retailers including cafes and restaurants.
The two-level building on a 172-square-metre site on the corner of Chester Street and the pedestrianised mall was built about 50 years ago as a banking chamber and branch premises and still bears the logo “CBC”.
It now houses Steve’s Wine Bar on the ground floor and an accounting practice on the first floor, bringing in total annual rental income for the property is $83,500 plus GST and building outgoings.
Steve’s Wine Bar has occupied the ground for the last 17 years and is on a current lease which expires at the end of June 2013 with an option for a further two years.
The restaurant pays an annual rental of $52,000 plus GST plus the building outgoings.
The rental increases are 4% each year with a review to market at the expiry of the current lease in June 2013.
The upper level tenant with its own access from Chester Street is OST Accounting, paying $31,500 per annum on similar terms.