The Schwartz family has listed two big Melbourne investment properties, including the city’s oldest pub – Dixon Hospitality Group’s Duke of Wellington.
Melbourne freeholds continue to lead the charge on yield benchmarks, averaging below six per cent and dipping below three per cent on select properties.
Publisher and property developer Morris ‘Morry’ Schwartz has put to market the East End strongholds of 2 Russell St, with the recently upgraded multi-level Duke of Wellington plus a nine-storey office tower, and 88 Flinders St, a 65-room hotel currently leased to Toga Far East under the Adina brand, plus mixed tenancies.
The Duke was established 1853, named after Field Marshal Arthur Wellesley (aka the Duke of Wellington), who in 1815 led the British forces to defeat Napoleon at Waterloo, and went on to become British Prime Minister in 1828.
The famous pub knows a colourful history, including former tenure by two-time premiership winner Brian ‘The Whale’ Roberts, in days gone the establishment enticing patrons to “have an ale with the Whale”.
It is located in Melbourne’s prestigious East End, opposite Federation Square, and currently leased to Dixon Hospitality, with a 3am licence. The offices behind are leased to a variety of tech and design companies.
Price expectation for the property is around $30 million.
The site of the Adina Hotel, leased to Toga until 2021 with no further options, also holds a refurbished IGA supermarket and a rear parcel of land, and internationally-renowned bar Eau De Vie.
This asset is tipped to fetch around $50 million.
Commercial property in the southern capital continues to be in extremely high demand, as seen in the recent sale of a Flinders St carpark to a Hong Kong conglomerate for $120m, representing a yield around five per cent.
The two East End Schwartz properties are being marketed as a portfolio, to be sold individually or together, through CBRE Melbourne Middle Markets agents Josh Rutman, Mark Wizel, Lewis Tong and Kiran Pillai in partnership with CBRE Hotels agents Rob Cross and Scott Callow.
In a market surging with opportunity, the agents report keen interest from offshore purchasers “mostly based in Asia” and suggest options such as strata subdivision or residential conversion add serious flavour to the future potential of the sites.
“The Eastern Core is currently experiencing a major shortage of office space, and we envisage that, if positioned correctly, 2 Russell Street can take full advantage of the rental uplift that owners are seeing for similar assets in the precinct,” offered Rutman.
The ‘East End Selection’ portfolio is being sold via an international Expressions of Interest campaign, closing Friday 27 October.
