Sydney-based developer Fortis has paid $19 million for a site in inner-Melbourne's Richmond on which it will build a ten-level mixed-use project.
The 1,298sq m corner site at 8 Brighton Street sits on the intersection of Church Street and Swan Street, boasting three street frontages.
Fortis’ proposed $90 million, SJB-designed project will offer more than 7,000sq m combined net lettable and net saleable area, and comprise retail offerings on the ground floor plus an additional nine levels of commercial and residential space.
Fortis said its plans for the site will commence in 2022 with a planning application expected to be submitted in early next year.
Negotiated by Ben Baines and Ted Dwyer of Colliers International, the transaction follows a number of other off-market sales in Richmond, notably the Goldfields Group purchase of a single-storey building at 587-593 Church Street for $19.2 million.
In September, Pallas Capital, alongside Fortis, picked up a 493sq m site between 18 and 22 Thomson Street in South Melbourne for $6.9 million.
Fortis has plans for a $27.5 million six-level office building on the site, expected to be completed in early-2023.
Colliers International associate director for Melbourne Ben Bains said transactions across Melbourne’s city fringe had remained busy throughout the pandemic, with upwards of $500 million worth of assets changing hands across the year.
“Melbourne’s city fringe commercial and residential markets have remained strong, even through the recent economic uncertainty.
“With such limited supply and pent up demand, a number of high-quality assets in strong locations are still transacting off-market.”
Leading into the pandemic, Melbourne’s CBD office market was the tightest in the country.
Since then, office markets in city fringes have proven relatively more resilient than those in CBDs, with forecast rents expected to fall more moderately in most areas during the next year.
Richmond remains one of a number of more affordable inner-suburban office markets—alongside Cremorne, Collingwood and South Yarra—that attracted a fresh wave of speculative commercial development pre-Covid-19, as CBD rents soared and vacancy rates hit record lows.
“We are positive that the demand for this space will continue to accelerate in the next few years,” Fortis director Charles Mellick said.
“Our newest site in Richmond is a reflection of our confidence in city-fringe locations.
“This development is an exciting new addition to the $800 million worth of Fortis projects currently under way in Melbourne.”
Other projects include a 37,000sq m commercial precinct in Clifton Hill and the $38 million, nine-level Pallas House in South Melbourne.
Across the city, the developer has a number of residential projects with sites in Brighton, Toorak and South Yarra as well as two completed apartment buildings in Glen Iris and one in Malvern.