The Warrnambool Backpackers in Stanley Street has sold to a group of local business people for a figure believed to be around $1.8 million.
The freehold and business were for sale by expression of interest and there were three offers for the property, which sold on Monday.
Harris & Wood real estate agent Danny Harris said the future of the property, which was on more than 2100 square metres, was "yet-to-be determined" but it would continue to operate as a backpackers for at least the next six months.
The building boasts a full commercial kitchen, licensed bar, and can accommodate up to 70 people.
Mr Harris said its location was a huge drawcard and interested parties had looked at it as site for future development.
Meanwhile, a Warrnambool industrial property sold for almost $300,000 above its reserve at auction on Friday.
The property, at 25 Robson Street, had a price guide of $510,000 to $540,000 and sold for $810,000.
Mr Harris said four south-west bidders "fought it out" and the property was purchased by a local business person.
He said the strong price and interest reflected the demand for that type of commercial property, which was in short supply.
"The West Warrnambool Industrial Estate is extremely tightly held," Mr Harris said. "I think you could count on one hand the amount of sales that have happened out there in the last 12 months."
In a separate sale, the motel freehold at 8 Spence Street also sold this week for $1.4 million to local investors.
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"It was quoted for sale for $1.35 to $1.45 million which represented approximately 5.65 per cent yield," Mr Harris said.
"Since the beginning of the boom the commercial market has lagged behind the residential market," he said. "But it's arguably got more momentum now than the residential market because of the lack of avenues to get a reasonable return on investment," Mr Harris said.
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