A high-profile Melbourne CBD freehold has hit the market, boasting a triple-frontage and big potential as a pub or mixed development.
The historic Metropolitan Hotel is on the busy corner of William and Lonsdale Streets, opposite the Mint, and close to bustling Flagstaff Railway Station and the city’s major courthouses. It is being offered for sale for the first time in over 20 years, and expected to fetch north of $7 million.
CBRE’s Josh Rutman and Scott Callow are marketing the property in conjunction with David Marks of Melbourne-based Killen Thomas. CBRE senior director – hotels, Scott Callow, told PubTIC the site could be redeveloped, but has a big future continuing as a pub too.
“We’re confident there will be many hoteliers looking to acquire it for ongoing use as a hotel, although I’m sure there will be other types of investors looking too.”
The hotel possesses an extremely rare liquor licence that allows it to trade seven days a week, 24 hours a day, which Callow believes will be of key interest.
“Liquor licences such as these are no longer issued to hotels making this a very valuable commodity and allowing the operator tremendous flexibility on how and when they choose to operate the business.”
Built in the mid-1800s, the heritage-façade building is leased to private operators until 2020 and currently returning $205,000 annually, with fixed 3.5 per cent increases.
The two level structure features a café-style bar, two dining areas and commercial kitchen, plus a cellar with a keg room and office space, and 20,000 passing pedestrians each day.
Freehold investments such as this have been in short supply in recent years, says Rutman.
“It’s very difficult to find sub-$10 million freeholds on the main streets of the Melbourne CBD, with only a handful selling in the past five years.”