Melbourne, 13 December 2015 – Collingwood is emerging as one of Melbourne’s most in-demand development areas, with investors vying to gain a foothold in the sought after market.
Demonstrating this trend, a local investor has recently snapped up a Collingwood industrial site for $3.3 million, following a competitive auction.
CBRE’s Victorian Development Sites team of Mark Wizel, Julian White, Jamus Campbell and Lewis Tong negotiated the sale of the 842sqm warehouse at 18 Down Street, which was marketed as both a commercial development site and an industrial investment opportunity.
The sale price represents a land rate of $3,919 per sqm – a strong result which Mr. White linked to the site’s improvements and potential to generate a holding income.
“Despite the highest earning potential for the site coming from its development potential, properties that can generate a strong holding income are increasingly being sought after in the market.”
“Both local and offshore developers are actively building themselves a pipeline of work by acquiring sites with income. This allows them to add more value via rezoning and eliminates some of the time pressures given they are being paid rent”
Strong interest was received throughout the campaign from a range of local and offshore developers, investors, speculators and owner occupiers. These groups were attracted to the sites substantial land size, 27 meters of street frontage, permit approval for a multi-level commercial development and prime location within close proximity to public transportation, retail amenities and the CBD.
Mr Wizel commented that whilst the buyer was a local investor, strong enquiry was witnessed throughout the campaign from Chinese groups.
“As Chinese buyers become more familiar with the Melbourne market, we are seeing increasing numbers of Chinese investors and developers making longer term investment decisions. This is a great sign for the Melbourne market, as it demonstrates the intention to be in Melbourne for the long term.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
