Investor Takes Up Prince Alfred Hotel

A Melbourne based investor overcame strong competition from rival bidders to pay $2.89 million on a yield of 4.7 per cent for the Prince Alfred Hotel at Port Melbourne.

According to Teska Carson’s Anthony Choi and Michael Ludski, with Lou Montalti and Ian Robertson of CRS, the 355 Bay Street property attracted more than 80 enquiries and four bidders at a well-attended auction.

Mr Choi said investors had been attracted to the very popular Bay Street location along with the secure lease to a well-established tenant.

"This is an extraordinarily well located property in the heart of one of Melbourne’s most popular inner-bayside suburbs with a new six year lease to a well-regarded tenant," Mr Choi said.

"Ultimately the property was purchased by an astute investor cognisant of the solid rental returns and potential for capital gain in such a desirable city fringe location."Located between Spring and Raglan streets on a 300 square metre corner site, the property comprises a 500 square metre, two level period brick building including a ground floor hotel, bar and dining area, eight bedrooms upstairs, and an outdoor area.

The property was sold subject to a new six year lease with three further six year options to Schultze Hotels Pty Ltd at a current rental of $137,000 per annum.

Mr Ludski said the security of the property’s 80-year trading history and the area’s strong population growth had also been considerations for potential purchasers.

"The area has seen extensive residential and commercial development in recent times, driven by Melbourne’s strong population growth, and property owners in the area have been the beneficiaries,’’ Mr Ludski said.