The 427-bay car park at 222 Russell Street in Melbourne’s CBD has sold for close to $17 million, at a yield of slightly more than 7 per cent. According to the Australian Financial Review, the result is a lot sharper than the property’s December 2011 book value of $14 million on capitalisation rate of 8.5 per cent, reflecting the keen appetite for the tightly held asset class.
The car park was fully leased to Wilson Parking and Mantra Hotel Group before being sold, and is on strata title within the Mantra Hotel development.
According to the AFR, increasing car parking costs and a diminishing amount of space have added to the defensive character of the asset class, with some car parks being seized for their potential development prospects, increasing the demand for remaining space.
Recent Melbourne CBD car park deals have included the purchase of 300 Flinders Street for $28.2 million, 250 La Trobe Street for $29.2 million. More recently, Total House at 170-190 Russell Street has been acquired for $40 million, with the 409-bay car park expected to be reworked for mixed use.