The first CBD auction of the year has kicked off with frenetic bidding by both local and offshore parties keen to snare a piece of Chinatown property.
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A crowd of more than 150 people gathered at 166 Russell Street, which sold for $5.01 million after a 30-minute auction and 95 bids.
Savills agents Clinton Baxter and Nick Peden handled the deal, which reflected a tight 3.8 per cent yield, well in excess of expectations.
A local investor beat a Chinese-based buyer for the four-storey property, which is leased to Cats Hair and Beauty, near the Bourke Street intersection.
Cats Hair and Beauty has a new five-year lease with a five-year option on the property starting in October 2014, paying $194,182 a year. The building is on a 136-square-metre site with 295 square metres of lettable space.
Mr Baxter received more than 220 inquiries about the property on the periphery of the Chinatown district.
"There are few opportunities to purchase assets of this quality in the sub-$10 million range so it's no surprise many investors were extremely keen to purchase," Mr Baxter said.
Mr Peden said the result showed investors were prepared to accept sub-4 per cent yields for prime retail assets.
"This is a new benchmark for the CBD," Mr Peden said.
The vendors, Lai Meng Wong, Mui Chun Cheew and Kok Leong Lee, paid $1.927 million for the building in 2008.
