Melbourne strip club the Spearmint Rhino has sold for about $7.7 million in a deal that could see the prime King Street site redeveloped into apartments or office space.
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The 110-year-old building went under the hammer for $225,000 more than expected at a busy investment auction at Crown Casino on Wednesday afternoon.
The new owners of 14-20 King Street could be able to wriggle out of a 20-year lease with a "rare 12-month landlord termination clause" allowing a developer to pay the current tenants out.
Marketing material heralded the site's exceptional location, close to Rialto Towers, the aquarium and Crown Casino.
Two bidders fought out for the property at the well-attended investment portfolio auction by Burgess.
The auctioneer could not help but throw in a few jokes about the venue's status as a strip club. One person who "inspected the building thought the pole was a fire evacuation," he quipped.
The 1918 square metre building is set on three levels, has a basement, and sits on an 822 square metre envelope with a 20-metre King Street frontage.
The club sits within Melbourne's liberal Capital City Zone, which would allow for residential or office development.
The club's operator won approval to increase occupancy to 600 people in early 2013, despite police opposition and concerns about violence on the King Street strip.
The tenant has operated the Spearmint Rhino on the site since 1993. It has a 20-year lease with options through to 2042. Annual rent is $442,863, reviewed each year.
In other sales at Crown Casino on Wednesday, a Keilor East Foodworks supermarket went under the hammer for $1.95 million and a Doncaster East service station sold for more than $9 million.
More to come
