Chapel St: Plum corner site sells, luxurious dental spa building up for grabs

Melbourne’s lockdown has failed to deter buyers, with a Chapel St corner site changing hands for millions of dollars.

A prime corner site on one of Melbourne’s biggest retail strips is set for a huge overhaul after it was snapped up for millions of dollars at an online auction.

Agents Fitzroys sold 232-234 Chapel St and 2-2A Cecil Place in Prahran for $3.84m after the double storey building came on the market for the first time in 50 years.

The 440sq m site has two retail spaces on Chapel St, one of which is leased by a sushi shop, along with office space on both levels facing Cecil St.

Fitzroys’ director David Bourke said the site was sold to a Melbourne family after more than 100 inquiries and performed better than expected after an asking price in the mid-to-high $3m range.

Mr Bourke said the sale showed there was still strong demand for commercial buildings along the famous strip despite the impact of Melbourne’s ongoing Covid-19 lockdown.

“High-quality assets have been in short supply on the market over the past 18 months, and there is a huge volume of capital waiting to be deployed across the market,” Mr Bourke said.

“The huge inquiry from occupiers and developers showed a huge confidence in the future of Chapel St, which is seeing a generational development and renewal phase in its immediate surrounds.”

Mr Bourke said the family was yet to reveal their plans for the site, but it was looking to redevelop parts of it and transform it into a “value-add opportunity”.

“That’s certainly the intention, in the short term they’ll try to further the leases on the ground floor, but in the longer term they’ll look to redevelop the site and maybe add another couple of levels there.”

Meanwhile, another Chapel St building with a luxurious dental surgery near the Jam Factory is also on the market.

Agents Teska Carson is selling the double storey, 482sq m site at 521-525 Chapel St in South Yarra for more than $12m.

The site has dental services on the ground level and offices upstairs, and is expected to return its new owners more than $460,000 in rental income per year.

Teska Carson director Michael Ludski said the agency had received more than 90 inquiries in the site from buyers throughout Melbourne and from interstate.

Mr Ludski said the building provided a solid investment opportunity due to the services provided by its tenants, who had a five-year lease with further options.

“Although it is in a retail location, this is a service industry that is immune to what is happening in the retail environment,” he said.

Expressions of interest in the site are set to close at the end of this week.