Melbourne, May 16, 2013 - CBRE Melbourne City Sales has been jointly appointed to market a trio of premium development sites strategically located across the Melbourne CBD in one of the most unique portfolio sales to hit the market in over a decade.
CBRE’s Mark Wizel and Josh Rutman in conjunction with Colliers International’s John Marasco and Matthew Stagg are marketing the portfolio comprising three prime sites suited to a variety of high-rise development outcomes including residential, commercial, hotel and retail (STCA).
The sites are located across the East (9-23 MacKenzie Street, Melbourne), Central (224-250 LaTrobe Street, Melbourne) and Flagstaff (229-241 Franklin Street, Melbourne) precincts of the Melbourne CBD, close to major train stations, tram routes and commercial, education and retail hubs.
Mr Wizel, CBRE Melbourne City Sales Director, said assets within the portfolio had been on the radar of many active buyers over the past 12 months and, as a result, the formal offering of the three properties was expected to attract significant interest from a range of local and off shore developers and land bankers.
“Over the past two years the Melbourne CBD has seen over $600million of development site acquisitions from Malaysian, Singaporean and mainland Chinese groups resulting in strong growth in prices being achieved for well-located development sites,” Mr Wizel said.
The centerpiece of the portfolio is a 3,197sq m site comprising a major 689-bay commercial car park at 224-250 LaTrobe Street. Zoned Capital City 1, the prime site is situated directly opposite Melbourne Central, the CBD’s largest shopping centre.
“This property has substantial development upside. It has the potential to accommodate several major high-rise buildings as well as providing enormous scope for multi-level retail tenancies. It will provide the successful buyer with an opportunity to create the Melbourne CBD’s next landmark building,” Mr Wizel said.
Anticipated to draw interest in excess of $40,000,000, the asset benefits from existing improvements comprising a 10-storey plus basement car parking station, operated by Wilson Parking, which services Melbourne Central Shopping Centre. There are two ground floor retail tenancies fronting LaTrobe Street and three fronting Little LaTrobe Street, with a combined net lettable area of 852.3sq m.
The 2,030sq m (approx.) development site at 9-23 McKenzie Street is located in a mixed-use zone in one of the CBD’s most sought after precincts and is expected to yield interest in excess of $20,000,000.
“This property has excellent development potential for a high-rise residential apartment tower,” Mr Wizel said.
“The neighboring property at 33 MacKenzie Street provides a strong indication of the development potential for this site. The successful project, 33M, was developed by Singaporean group Chip Eng Seng and comprises 35 levels, 388 apartments and 151 car parks.”
The 1,548sq m (approx.) site at 229-241 Franklin Street is home to an existing two-level warehouse constructed over the full site, with a total building area of around 2,000sq m.
The property is zoned Capital City 1 and is expected to receive interest in excess of $16,000,000.
“The fastest-growing precinct in the CBD is the Western precinct,” Mr Wizel said. “It has benefited from massive investment by both the private and government sectors over the past decade and is home to major destinations such as Queen Victoria Market, Southern Cross Station, Telstra Dome and Docklands.
“This location has become very popular for residential development given the lifestyle it affords residents, with its easy access to Melbourne CBD amenities, retail and entertainment destinations. With a large site area, this property has excellent residential development potential which ultimately is underpinned by its close proximity to Melbourne’s world leading educations institutions, RMIT and Melbourne University.”
Other successful residential developments in the precinct include Art on the Park (330-360 William St, 35 levels, 596 apartments); The Istana Melbourne (218-236 A’Beckett St, 25 levels, 320 apartments); and CityTEMPO (181 A’Beckett St, 29 levels, 229 apartments).
Mr Marasco, Colliers International Managing Director – Investment Services, said the portfolio sale represented an extraordinary opportunity to secure a future development pipeline with holding income.
“Melbourne’s population is predicted to grow by one million people by 2020, and this population growth is driving demand for inner city residential accommodation,” Mr Marasco said.
Over the past five years, the City of Melbourne has grown at an average rate of 6.1 per cent. The current reporting year is the second consecutive year to see inner city population growth which rivals that of the outer suburbs, illustrating the growing trend towards inner city living.
“This positive sentiment has resulted in Melbourne becoming increasingly popular with major international developers who have acquired key sites throughout the CBD and commenced development projects immediately, whilst in some instance purchasing sites for future residential apartment development,” Mr Marasco said.
“Therefore, high quality sites in prime Melbourne CBD locations are becoming scarce and difficult to acquire which no doubt is also being driven by the consistently strong performance of the high rise residential apartment market that continues to attract buyers both locally and from abroad.“
The three properties are being offered for sale by International Expressions of Interest closing Friday June 21 at 3pm. They are to be sold individually, in any combination or as a portfolio. The total realisation of the portfolio as a whole is anticipated to be in excess of AUD $75million.
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