SYDNEY investors have seen off Victorian and foreign competition to snap up two blocks near the Queen Victoria Market.
Tightly held city fringe properties in Melbourne were seen as attractive, being much cheaper compared with properties in Sydney, CBRE agent Max Ruttner said.
“We are seeing more Sydney buyers coming here to buy on the fringe of the Melbourne CBD because they can pay $1 million or to $2 million less than for similar Sydney properties,” he said.
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The auction at 73-75 Peel St attracted eight bidders and a strong crowd.
A two-storey block at 73-75 Peel St, West Melbourne soared $800,000 above reserve to fetch $4.4 million on October 19.
The vendor enjoyed a price gain of $3 million with a purchase price of $1.4 million in 2009, sales records show.
The compact 246sq m block offers 306sq m of floor space over two levels, with the potential to add another two levels.
The retail floor at 73-75 Peel St.
The office space in the building.
The auction drew five other Melbourne buyers plus one each from China and Malaysia. It started with a bid of $2.8 million and rose quickly to $3.6 million, when it was announced on the market.
“The attraction of the property was the location, dual use and the growth potential,” Mr Ruttner said.
The Sydney buyer, who had a representative at the auction, intends to land bank and capitalise on capital growth for the well-located block opposite the market, which is slated for a major redevelopment.
“They may reposition the property and build two more levels,” Mr Ruttner said.
Two weeks earlier, a Sydney investor paid $4.235 million for nearby 47-53 Capel St on 297sq m.
Both properties are well serviced by trams and within walking to Flagstaff Station and the Melbourne CBD.