Situated on John Street, the property achieved a low yield of just 3.4% compared to the Reserve Bank’s 3.6% cash rate, indicating strong demand for secure long-term assets in suburban retail areas.
Investor focus in recent months has shifted towards stable commercial assets with reliable rental income and long-term tenants as broader market conditions remain uncertain. Despite a cautious investment climate, the building attracted significant interest thanks to its leasing agreement with a major tenant and its position in a vibrant multicultural precinct.
The building covers 1,467 square metres, featuring upgraded retail and office space across two levels. It has housed the bank for over 50 years and received a refurbishment in 2023. Supported by a 10-year lease with options extending through to 2043, it offers the tenant security that has become a key priority for investors. The $31.3 million price translates to $36,000 per square metre of land, a record figure that reflects the value buyers place on properties leased to major institutions.
The sale underscores a broader pattern where private buyers, often supported by foreign capital, are becoming increasingly active in specialised market segments where institutional investors remain cautious. The buyer, a Melbourne-based investor backed by offshore funds, outbid individual entities including local syndicates and overseas buyers. The deal confirms continued interest in low-risk assets like bank branches, particularly during times of economic volatility.
With demand for bank-leased properties holding steady, assets with long leases in established retail areas are seen as lower-risk options. Though economic pressures may slightly affect future yields, this deal points to ongoing confidence in top-tier commercial property.
