More than 50 suburban office buildings sold in the year to June 2015 for a total of $776 million, a 26 per cent increase since 2014.

Investor and horse breeder Peter Anastasiou sold the 31-47 Joseph Street property, formerly occupied by Hewlett Packard, for $23.98 million, on a sharp 7.25 per cent yield. Title documents show investor Jingyi Ye has placed a caveat on the site which Mr Anastasiou bought in 2009.

Savills agents Julian Heatherich and Nick Peden sold the site through an expressions of interest campaign which attracted 90 enquiries from a range of potential buyers – funds, syndicates and local and offshore investors.

The three-level 8839 square metre modern building is on a 2.3 hectare site and leased to several different private and government tenants, including Ambulance Victoria. It returns around $1.74 million a year in rent.

Mr Heatherich said the the sale was closed within 48 hours of the campaign ending, with more than half the offers coming from overseas.

"There's not a lot of supply but there is plenty of demand for investment properties. It's very very difficult to get something in the city at the moment due to high demand," he said.

"Yields in the suburbs have traditionally been better but they are starting to sharpen," he said.

The Blackburn North property was the third suburban deal closed by the Savills team in the past few months. A Centrelink building, at 61-65 Anderson Street, Lilydale, sold for $8.45 million on a 7.79 per cent yield.

Another Centrelink-leased building at 172-186 Moreland Road, in Brunswick, fetched $20.95 million in June on a yield of only 6.45 per cent. It was the lowest yield achieved the year.

Mining magnate Paul Marks had bought the building three years ago and sold it on to Auslink Investment Management. The double-storey building is relatively new but on 4400 square metres in a location with future development potential between Sydney Road and the Upfield railway line.

It is the second suburban office building off-loaded by Mr Marks this year. In March he sold 14-16 Prospect Street in Box Hill – also occupied by Centrelink – to off-shore investors for $14 million.

"Yields are getting sharper and sharper," Mr Heatherich said.

Research by Savills shows private buyers have dominated the suburban market, making up nearly 70 per cent of purchases in the past 12 months, however that profile is starting to shift.

"Properties with blue chip and government tenants, long leases, modern buildings with low upkeep and development upside will fetch a premium and that is exactly what happened here."