Developers Move on Melbourne Sites

Deals continuing to flow for prime sites across Melbourne’s inner ring, with developers snapping up sites through lockdown.

Mid-market lender Pallas Capital along with Sydney-based developer Fortis Development Group have picked up a prominent development site in South Melbourne.

The 493sq m site, located between 18 and 22 Thomson Street, was secured for $6.9 million and negotiated by Ben Appel of Appel Property in conjunction with Alby Tomassi of Tomassi & Co.

The three-level 1970s-era office building sits one block back from Albert Park Lake and in close proximity to the upcoming Anzac metro station as well as Albert Park, the Royal Botanical Gardens and South Melbourne Market.

Fortis will now move ahead with plans for a $27.5 million six-level office building on site, expected to be completed in early-2023.

Fortis director Charles Mellick said premium office space in South Melbourne is in great demand.

“We’ve already leased out 60 per cent of our other South Melbourne site, Pallas House, through off-market deals over the past four months.

“Off the back of [that] success, we’re confident of similar demand for the space in Thomson Street, which is only expected to increase with the completion of Anzac station in the coming years.”

Fortis also recently settled on a development site at 10-12 Male Street and 41A Black Street, Brighton, parting with $14.25 million and sounding out plans for a 16-unit residential project.

The developer, which currently has $800 million in projects under construction across Melbourne, is also moving ahead with plans at sites in Toorak, South Yarra, Balmoral and Glen Iris, Malvern and South Melbourne.

Singapore-based Baksh Capital and local developer PrimeLand Group have outlaid $9 million for a heritage-listed boutique hotel in East Melbourne.

Located on a 930sq m site at 101 Powlett Street, the mid-19th century, 26-room Magnolia Court hotel will now be renovated and restored.

“We are particularly excited for this historic asset which has received strong interest from leading co-living operators and hospitality management groups,” Baksh Capital managing director Birbal Singh Bajaj said.

The acquisition is the second between PrimeLand and Baksh Capital, after their purchase of a 3,000sq m development site on Swan Street, Richmond, on which they are developing an eight-level 150-room hotel.

Meanwhile, Melbourne investors are still proving thirsty for pub assets too, with the sale of the freehold interest of the Wayside Inn despite current closures under Victoria’s Covid-19 provisions.

The 587sq m site hotel, located at 446 City Road in South Melbourne, was sold through JLL to a private investor, with pricing withheld.

The property holds capital-city zoning with potential for a new owner to incorporate an office or retail component.

And Rydges on Swanston, the hotel central to Victoria’s second Covid-19 wave, has also sold through Jones Real Estate after it was offered with vacant possession by Adelaide-based hotel investor David Horbelt.

Private development group Pelligra picked up the 107-room hotel in Carlton, opposite the University of Melbourne, for $35 million.

Colliers is handling the sale of a vacant site at 596 St Kilda Road, listed by Chinese-Australian investors Tim Chang and Michael Xie after the pair purchased the property in 2017 for $34 million.

The 1800sq m site, formerly occupied by a low-level strata apartment block, holds development approval for a Bates Smart-designed 19-level residential tower with 101 apartments.

Prime site in outer suburbs hits the block

Further afield in Werribee, 32 km south-west of Melbourne's CBD, CBRE in conjunction with ICG Property are offering a 2.2 hectare corner landholding and development site.

The site, located at 246 Hoppers Lane, has price expectations of $13 million with up to 22,500sq m of commercial development, potentially positioned towards medical use.

The site sits within close proximity to Mercy Health (Werribee Hospital), St Vincent’s Private Hospital, Melbourne University, Victoria University, Wyndham Private Medical Centre, Women’s Health Hub, NDIS, Wyndham Medical Centre.