Landmark St Kilda Road corner site tipped to generate interest admist supply shortage

One of St Kilda Road’s most prominent corner properties has been listed for sale, providing a significant redevelopment or refurbishment opportunity. 

CBRE’s Kiran Pillai and Tom Ryan, together with JLL’s Josh Rutman and Tim Carr, have been appointed to sell the gateway 424 – 426 St Kilda Road asset under instructions from Advise Transact’s Lewis Tong and Mark Wizel, acting on behalf of Hong Kong group Mars Family Holdings.

Situated at the intersection of St Kilda Road and Kings Way, the Illoura House property occupies one of the largest triple-fronted landholdings on the boulevard of just under 4,700sqm, and is situated within the tightly held Domain precinct.

Existing improvements include two six-level office buildings joined by a large glass atrium, providing a total net lettable area of 12,074sqm complemented by 175 basement car parks.

The site’s Commercial 1 Zone also allows for a development of up to 18 levels subject to the relevant planning approvals, with the site previously approved for a mixed-use residential project with a gross floor area of more than 50,000sqm.

CBRE Senior Director Kiran Pillai noted, “Given the substantial existing improvements and development potential, we expect the sale campaign to generate significant local and offshore buyer interest. There is potential to explore opportunities for a major build-to-rent or build-to-sell redevelopment, capitalising on the site’s inner-city location and proximity to the new Anzac railway station. An incoming owner could also look to refurbish the existing office buildings or explore options for a hotel or healthcare redevelopment.”

JLL Executive Director Josh Rutman added, “The northern precinct of St Kilda Road has largely been developed and there are limited opportunities to secure high quality sites. 424 – 426 St Kilda Road is no doubt one of the best remaining sites and offers the ability to either reposition the asset and hold for the future or alternatively develop in the short to medium term and take advantage of the predicted shortage of commercial and or residential accommodation.”

The St Kilda Road precinct has undergone significant transformation over the past decade to become a major mixed-used hub, with increasing interest from residential developers, hospitality users and healthcare providers.

The market is expected to see further growth spurred by the $12.5bn Metro Tunnel Project and new Anzac station, which will be completed in 2025 and provide a direct link to the CBD and greater Melbourne. 

However, a lack of new apartment and office supply is expected to be a key focus, with the precinct’s future five-year apartment supply being 52% less than the previous five years and just three new office projects in the pipeline totalling 28,988sqm over the same period.

424 – 426 St Kilda is being offered for sale by Expressions of Interest closing Thursday December 1 at 2pm.