Colliers International to auction securely leased ground and basement levels of 118 Russell Street
Two prime corner retail assets at the "Paris" end of the Melbourne CBD will go under the hammer individually or in one line later this month, as buyers vie for central-city investment opportunities.
The ground and basement levels of 118 Russell Street, at the intersection of Little Collins Street, are securely leased to hospitality and lifestyle tenants and expected to field $4million combined.
Award-winning bakery café Brioche By Philip occupies the ground-level tenancy, while popular Pilates and barre gym S3 Studios occupies the basement.
Colliers International’s Oliver Hay, David Sia and Daniel Wolman have been appointed to auction the assets, which form part of the iconic Fender Katsilidis-designed Hero building.
“Both floors have been met with substantial enquiry from local and international retail investors,” Mr Hay said.
“At the 'Paris' end of the CBD on a highly visible corner, they are considered real trophy investments. It is becoming increasingly evident that the market is prepared to compromise on yield for the enjoyment and status of a premium CBD asset.”
Mr Hay said both floors showcased high-quality fitouts, which would provide long-term depreciation tax benefits.
“With the tenancies taking a combined rent total of $226,167 per annum, plus GST and outgoings, the return on investment is unquestionable,” he said.
“Brioche By Philip, which has claimed awards for the best bakery and best sourdough bread in Melbourne, has committed to seven years, commencing in April, 2016.
“S3 Studios has signed a three-year lease, starting at the end of 2015 with three further options to renew.”
Mr Sia said the prime location within “a stone’s throw” of Melbourne landmarks like Chinatown, high-end Collins Street boutiques and popular bars and eateries, was the key selling point.
“The building receives high volumes of pedestrian traffic and street exposure, especially given the surrounding high-density office towers, including 120 Collins and the Westpac headquarters,” he said.
“The area consists of a concentrated and constantly developing residential and workforce population.
“There is convenient access to public transport, including Parliament Station and city tram routes on both Collins and Bourke streets.”
The ground and basement floors of 118 Russell Street, Melbourne, will go to auction on June 8 at 12.30pm and 1pm respectively.