The sale continued a strong trend towards increasingly tight yields being paid for central city properties – 384-386 Bourke Street sold for a 3.07 per cent yield.

Savills Australia's Clinton Baxter, who negotiated the deal with colleague Nick Peden​, said well-located freestanding CBD buildings were experiencing significant yield compression in the face of strong competition among buyers.

Earlier this month, planning Minister Richard Wynne stunned the property industry when he introduced interim planning rules requiring minimum setbacks and plot ratios ahead of a year-long central city planning review.

The two-storey shop fetched a land rate of $29,182 a square metre which suggested the new rules had not affected its development potential, Mr Baxter said.

"The yield also shows that investors are factoring in strong future growth as Melbourne's CBD continues its rapid transformation ... with a significant increase in population density," he said.

Mr Peden said interest was driven by the property's location 60 metres from Bourke Street Mall, the large 514 square metre site with two street frontages offering, future development potential and the lease to longstanding tenant OPSM on a net rental of $460,576 per annum.