A popular St Kilda landmark building leased by national hostel operator Bounce has hit the market for just the second time in six decades, with price expectations of $9 million plus.
The three-level standalone, fully-leased freehold building, located at 24 Grey Street, St Kilda, spans 1680sqm and features 24 guest rooms, a café, common areas, a rooftop bar with liquor licences and a ground floor bar.
The building dates back to the 1800s as a ‘coffee palace’ where teetotallers would enjoy coffee instead of going to the pub. Picture: realcommercial.com.au
Sales agent Luka Marolt from Crabtrees Real Estate, who is handling the sale alongside Gavin Dumas and Pana Kritikos, said the asset was being sold by a private investor and it has attracted good buyer interest.
“We are seeing strong demand from both local Melbourne investors and international buyers seeking to be part of St Kilda’s resurgence,” he said.
“This growing interest reflects confidence in the suburb’s transformation, as St Kilda continues its renaissance toward a landmark future.”
Mr Marolt said it was difficult to pinpoint a single buyer class for such an asset due to its multiple layers of appeal.
The tenant, Roamer by Bounce, has a respectable 8.6 rating on Hostel World. Picture: realcommercial.com.au
“The building itself is a highly prized landmark St Kilda property, making it exceptionally attractive to a broad range of investors and developers seeking exposure to one of Australia’s famous suburbs,” he said.
“In addition, the nature of the tenancy introduces a niche group of investors who understand strength and stability the hostel accommodation brings because of its bulletproof nature.
“Freeholds of this nature just do not come to the market often, this is the second time in over 60 years 24 Grey street has hit the market. This shows the scarcity of an offering of this nature.”
Home to Roamer by Bounce since 2021 – and formerly called Selina – the hostel is a popular accommodation choice for budget travellers and was awarded hostelworld.com’s HOSCARS 2024 Most Popular Hostel in Melbourne accolade, and is highly rated by travellers.
It gets an 8.6 out of 10 rating, with guests praising it for its social life, location, and quality of communal areas.
Guests praise Roamer for its social life and rooftop bar. Picture: realcommercial.com.au
Defined by its heritage-listed three storey façade, the building is believed to have been built in the late 1800s and was St Kilda’s first town hall, Melbourne’s second largest at the time, Mr Marolt said.
“It then became one of Melbourne’s first ‘coffee palaces’ which was a hall room home to bazars, theatrical events, concerts and alike, a part of the temperance movement,” he said.
Located close to public transport and the iconic St Kilda Beach, the asset generates an annual income of $525,000 plus GST, with an additional upside through turnover-based rent.
“St Kilda has and always will be one of Victoria’s favourite suburbs because it has everything Melbourne has to offer,” Mr Marolt said.
24 Grey Street is for sale via an expressions of interest campaign with $9m price hopes. Picture: realcommercial.com.au
“It’s the spot to be with the luxury of being by the coast, its nightlife, events, and its short distance to the CBD – developers are backing its location and many new key major developments are underway.”
Expressions of Interest to buy 24 Grey Street, St Kilda close 20 May.
“Based on the income, quality and size of improvements and location we expect the property to sell for in excess of $9 million,” Mr Marolt said.
The latest commercial property news
Get the latest news and insights straight to you.
Sign up