Chinese Developer Secures Prime Melbourne Development for $22m

A Southbank development site across from Melbourne’s Crown Casino Complex has sold for $22 million to a Chinese developer, looking to undertake their first Australian development project.

The sale, which was negotiated by CBRE, was for a single fronted, 940-square metre site located at 88 Queensbridge Street.

Currently on the site are two separate office buildings, however a grant was given in 2013 to construct a 55 level tower designed by architects Rotheloweman, consisting of 295 apartments.

This is the second time in 12-months that the land has been sold, with Starryland, a subsidiary of a Chinese developer, buying the land for $18 million in 2013.

"The re-sale is a clear demonstration of the confidence that offshore developers have for permit approved sites in both the Melbourne CBD and immediate fringe markets,” CBRE City Sales Director Mark Wizel said.

Mr Wizel also added that even with the talk from experts of a perceived future oversupply in Melbourne apartments, offshore buyers aren’t sharing the same view and are continuing to hunt for sites for mixed use developments.

The selling price of $22 million sets the sale at $23,400 per square metre, a new benchmark for the Southbank area.

Mr Wizel said this indicates the maturity of the market, with companies such as Central Equity having created a precinct which was recognised by overseas investors as profitable, safe and proven.

“A number of highly successful Central Equity projects and the recent success of Southbank developments such as the Prima Pearl diagonally opposite this site and Wrap Apartments on City Road have conveyed a strong message of confidence to offshore groups,” Mr Wizel said.

The sale comes amid signs of continued strengths in the Melbourne market, with strong pre-sales recorded in numerous recent projects.

CBRE director of residential projects Andrew Leoncelli says that the unprecedented resale rates highlight the strength of the Melbourne market and are one of the reasons why both local and international investors want to invest in Melbourne.

This sale follows the sales of nearby sites 51-65 Clarke Street, Southbank and 55-65 Dorcas Street, South Melbourne, for a combined total of $65 million.

Both of these sites were also sold to mainland Chinese groups making their first move on the Melbourne property market.