A mainland Chinese investor has snapped up a historic inner-city Melbourne pub on a yield below 5 per cent in a deal that highlights the significant appetite among private investors for well-located metropolitan pubs, despite a recent surge in values.

Standing on a corner site across the road from the popular South Melbourne Market, the 153-year-old The George Hotel sold for $5.2 million – a 30 per cent capital gain in less than three years – on a yield of 4.86 per cent.