Private investor snaps up Collins Street Telstra store premises for $9.25 million ahead of auction

The Telstra store premises on the corner of Collins and Swanston streets – one of the busiest pedestrian corners in the Melbourne CBD – has sold ahead of auction for $9.25 million.

The buyer is a private Victorian investor who has paid the equivalent of $142,308 per square metre for the 65-square-metre shop.

It is tenanted by Telstra, which took over the lease from Vodafone last year and has a seven-year lease. The shopfront has not been vacant in the last 40 years.

The shopfront generates net income of about $544,000 per annum with 5% fixed annual rental increases equating to a yield of 5.8%

CBRE’s Josh Rutman, who negotiated the sale along with colleagues Mark Wizel and Max Cookes, said the vendor – ASX-listed property fund manager Charter Hall – had received a number of “good offers” before the scheduled on-site auction. 

“There was an auction before the auction,” Rutman told Property Observer.

The property had been listed for sale with around $9 million hopes.

The shop at 220 Collins Street is situated on the ground floor of the 1932 Art Deco Manchester Unity building, whose completion was said to signal to Melburnians the end of the Great Depression.

It was subsequently subdivided and sold down as individual units in 1996.

It stands on a prime piece of Melbourne CBD real estate opposite the Town Hall, with about 15 million pedestrians filing past every ear – 50,000 each day.

Charter Hall had held the shop premises since 1997 in one of its small unlisted retail funds.

Telstra took over from Vodafone as its tenant last year. The shopfront has not been vacant in the last 40 years.

The Manchester Unity building was the tallest building in Melbourne when it was finished in 1932.

The corner tower is built in the commercial Gothic Modern style inspired by Raymond Hood’s competition-winning Chicago Tribune Tower.

Photographs by Alistair Walsh