Sky high price for vertical real estate as Melbourne CBD wall sells for $3.05 million
31 August 2015 Simon Leo Brown
It seems Melbourne's booming real estate prices are not restricted to homes, with part of a wall in Melbourne's CBD selling at auction this week for $3.05 million.
Known simply as "the wall", the 117-square-metre "property" is the side of a building near the corner of Flinders Street and Swanston Street, Melbourne's busiest pedestrian crossing.
Speaking before the auction, agent Graeme Watson said the wall would provide an unusually high return for a CBD property.
Mr Watson said the property was leased by an outdoor advertising company for $357,000 per annum and housed a digital billboard which itself was worth more than $1 million.
He said CBD investment properties normally produced a yield of 3 to 4 per cent.
This wall was eventually sold with a yield of 11.7 per cent.
"The permit that allows this sign to exist expires in 25 years, and then the next-door neighbour could build a high-rise building there and cover the wall up," Mr Watson told 774 ABC Melbourne's Red Symons.
Such a turn of events would render the multi-million dollar property worthless within decades, hence the high return on the initial investment.
Four bidders vied for the property at auction, with the winning bid coming from a private investor.
Mr Watson said the sale of the wall had captured his imagination.
"I see walls all around the city and I think 'I wonder if I can go and knock on the door there and see if I can buy their wall'," he said.
6 August 2015