Melbourne CBD wall fetches more than $3 million at Auction

Friday 7 August 2015

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Four walls and a roof are usually a bare minimum for property buyers — especially those who part with more than $3 million.

But that’s what a buyer shelled out for a single wall of a Flinders St building when it went under the hammer in the CBD this week. The 117sqm wall, home to a digital advertising sign, is just metres from the busy Swanston St intersection and across from Flinders St train station.

Burgess Rawson agent Graeme Watson said the auction was believed to be the first of its kind in Melbourne. “In my 30 years in commercial property, it’s the most unusual property I’ve ever sold,” he said.

The buyer, who already owns a wall with an advertising sign on it in Sydney, paid $3.05 million for lot 7/238 Flinders St. Mr Watson said the sale was believed to be the first of its kind in Melbourne. Mr Watson said he knew of only two other similar sales in Australia, both in Sydney — a wall containing a Coca Cola sign in Kings Cross and another on the Princess Hwy.

The wall owners lease their vertical properties to the sign advertisers. The Flinders St wall earns an annual rent of $357,000 from the sign owner who has a lease until 2039.

Mr Watson said three bidders vied for the wall at Wednesday’s auction, drawn by its attractive 11 per cent rental yield. He said the rental yield was much higher than regular commercial properties that often had yields of 3-4 per cent.

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