The prime central business district block on the corner of Lava and Liebig streets, which is home to the 154-year-old Victoria Hotel, is expected to sell at auction next month for between $2.5 million and $3 million.

Along with the Vic Hotel, the building houses the Optus store and Tony Pola Finance and Housing Loans. It has been owned by a syndicate group comprising local residents for about 20 years.

The site, which includes 16 accommodation rooms above the Optus shop and a drive-through bottle shop, provides a rental return of about $208,000 a year.

Real Estate agent Brian Hancock for Brian O’Halloran and Co said he was unable to recall a sale of this size in recent history.

“We would expect it to sell for between $2.5 million and $3 million,” he said.

“There just hasn’t been anything of this magnitude.”

Mr Hancock compared the sale to the Wannon Water building on the corner of Fairy and Koroit streets, which was believed to have sold for $2.5 million.

“You can never say it’s the most sought-after site in Warrnambool but it would be up there with them,” he said.

“The position is the key. The fact is it’s at a very busy intersection and a vibrant part of the city.

“It’s a very large corner site and the vendor syndicate is looking to wind it up,” he said. “It’s a great opportunity for a group of investors.

“The hotel has a 20-year lease. All the tenants are on new or existing leases.”

Mr Hancock said a large marketing campaign would begin within the week and there was every chance it would attract international buyers.

“We will begin a fairly comprehensive marketing campaign,” he said. “It will be out there. There is every chance we’ll get an overseas buyer. This is a substantial corner in Warrnambool.

“The pub is a lovely sandstone building built at the turn of the century.

“It’s been a good watering hole for many patrons for a number of years. We’re looking forward to the sale.”

The auction will be held on March 23 at the Warrnambool Bowls Club on Timor Street at 2pm.