Sydney-based boutique developer Fortis is furthering its exposure to Melbourne’s fringe office market, lodging plans for a $65-million commercial building in South Melbourne.
The developer plans to build a 18-storey, premium-grade commercial building on a 330sq m, pentagon-shaped site at 313-317 Kings Way.
Fortis has moved quickly to lodge plans, designed by Elenberg Fraser, after picking up the South Melbourne site for $5 million last month in a deal negotiated by Savills.
The planned building will also offer “uninterrupted views” of Albert Park, Port Phillip Bay and the CBD, as well as basement parking and dedicated end-of-trip facilities for tenants.
Non-bank lender Pallas Capital, Fortis’ parent company, funded the acquisition of the site and will now fund construction.
Fortis director Charles Mellick said the project, offering a combination of luxury whole-floor tenancies, would add to the developer’s growing portfolio in South Melbourne, where the company is delivering projects on four other sites.
“Since 2020, [we] have acquired approximately $33 million of commercial fringe assets in South Melbourne,” Mellick said.
“These assets will have an expected end value of circa $180 million once developed.
“Kings Way is one of the four projects we are currently developing in this location, in response to the robust demand for high-quality office spaces in city-fringe areas.”
Among its current projects is a $38-million, nine-level office at 67-69 Palmerston Crescent—a site it acquired in January for $8.55 million.
Fortis is also building a six-level office building at 18-22 Thomson Street, with an expected end value of $27.5 million.
At 34 Eastern Road, the developer is also planning a $47-million, seven-level, 3900sq m office building on a site it paid $12 million for.
Fortis’ Kings Way and Eastern Road sites are also a short distance from the coming Anzac Metro station, Coventry Street and Clarendon Street retail districts, and South Melbourne Market.
The expected end value of Fortis’ Melbourne projects currently under construction or under a planning proposal has surpassed $1 billion, with a further $1.25-billion pipeline of work in Sydney.
The developer will be banking on an uptake in office space post-pandemic after Melbourne became the only CBD in the country to experience negative net demand during the past six months.
Office vacancy in the CBD hit 10.4 per cent while the similarly positioned CBD fringe markets of St Kilda Road and Southbank are now at 16.3 per cent and 15.2 per cent respectively.
Melbourne’s CBD, 2kms from South Melbourne, has the highest amount of new supply coming to the market in the next six months.
In the fringe suburb of Cremorne, Fortis also intends to undertake a $40-million new build on an amalgamated site, 65-81 Dover Street, and deliver a commercial development with an end value of about $130 million.
Last November, Fortis paid $19 million for a 1300sq m corner site at 8 Brighton Street in neighbouring Richmond with plans for a 10-level mixed-use project.
