South Melbourne’s historic Water Rat Hotel is on the market, with a short lease and favourable zoning and development potential on the 1858 property.
Druids Hotel was the original to open on the prominent corner of Park and Moray Streets, later becoming the Freemason’s Hotel, and since 1991 the Water Rat Hotel, following a major renovation.
An icon of the area, just three kilometres from the Melbourne CBD, the pub has a rich history – highlighted by the 1973 murder onsite of Painters & Dockers Union Secretary Pat Shannon.
The two-storey pub incorporates two separate bar areas, outdoor seating, expansive rooftop terrace and first-floor function space totalling 513sqm, on a 314sqm block with mixed-use zoning and potential for development (STCA).
South Melbourne’s proximity to the CBD, now ranked Australia’s most densely populated area*, is seeing rapid growth and reflects Victoria’s third-highest rate per square metre for residential property, averaging $10.8k.
The current tenant’s lease is due to end within a year, with no further options, making the asset significant for Victoria’s operators starved of freehold opportunities.
The Water Rat is being marketed by CBRE’s Justin Dowers, Will Connolly and Tim Last, in conjunction with Burges Rawson’s Terry Board and Nicholas Breheny.
“Given the prime corner location and substantial existing improvements, the Water Rat Hotel provides ultimate flexibility for investors, developers and future owner-occupiers,” offers Connolly.
“With South Melbourne currently experiencing a major shortage of mixed-use commercial properties with significant rental upside, we envisage that, if positioned currently, the Water Rat Hotel can take full advantage of the rental uplift that owners are seeing for similar assets in the area.”
The Water Rat Hotel freehold is being sold by Expressions of Interest, closing Thursday, 2 November.
*Source: Australian Bureau of Statistics