An office building located in South Melbourne has sold well above preliminary expectations, indicating strong demand for assets that will deliver significant capital growth.

Savills Australia’s Benson Zhou, Jesse Radisich and Nick Peden brokered the deal for 30-38 Thistlethwaite Street, South Melbourne and said the asset accumulated vast interest.

“Over 100 interested parties were registered throughout the expressions of interest campaign with multiple highly competitive offers received,” Mr Zhou said.

“The final sale price of $6.5 million was well above initial expectations of $5.5 million and represents a tight yield of 2.4 percent and a strong land rate of $7,352/sq m,” Mr Radisich said.

A local investor ultimately secured the investment and Mr Zhou said the sale is a reflection of the current demand for such assets on the market.

“This transaction highlights the current flight from investors/land bankers to income producing assets that present significant future development and upside potential,” he said.

“The deal follows on from the recent landmark sale of 6-78 Buckhurst Street, South Melbourne, which is clearly showing the buyers are confident in the future of Fisherman’s Bend,” Mr Zhou said.