Grocon To Offload CUB Landholdings

Leading real estate company Grocon is moving to sell two of its three remaining landholdings at the former CUB site in the Melbourne CBD, with proceeds from the sale expected to exceed $60 million.

The sites, totaling 6,600sqm, form part of Grocon’s highly successful Swanston Square development and are bound by Queensbridge and Bouverie Streets.

CBRE Melbourne City Sales agents Mark Wizel, Josh Rutman and Tom Tuxworth have been engaged by Grocon to conduct an international Expressions of Interest campaign, which is set to commence next week.

Grocon Chief Executive Carolyn Viney said that as the sites have potential for high density development they felt it was a good time to test the market.

"Recent site sales in and around the Melbourne CBD have achieved strong values and these landholdings have the benefit of being strategically located between RMIT and Melbourne University, as well as in close proximity to the attractions of the CBD and Carlton," said Viney.

“Our two residential developments on the former brewery site have been hugely successful and we now have some 800 apartments under construction on that site. We have another five development projects underway in various stages of delivery in Melbourne, as well as the $1.1bn Victorian Comprehensive Cancer Centre in Parkville, so we’re well represented in the Melbourne market.

“This sale will enable us to further diversify both geographically and across property sectors as we look to fund a number of new business opportunities around the country in what is the largest development pipeline in our company’s history.”

The Grocon land is split into two titles and will be offered either individually or in one line.

The campaign is expected to generate strong interest from both offshore and local groups as active groups look to secure well located land parcels to take advantage of the well performed Melbourne Residential Apartment market that continues to attract unprecedented interest from buyers both locally and abroad.

CBRE Director Mark Wizel, who is a specialist in the Asian investment space, said Melbourne had been attracting fresh interest from a wide range of Malaysian, Singaporean and mainland Chinese developers.

“These groups recognise the strong sustained performance of the Melbourne residential market and interestingly in recent times it has been groups that have already built in Melbourne that are being more aggressive than those first time groups looking to break into the market,” Mr Wizel said.

“Since mid-2011, Asian developers have acquired circa $1.8 billion in Melbourne sites and there is no sign of any slowing in interest. More recently we have seen the emergence of new groups such as Hiap Hoe, UEM, ICD, Aspial and Fragrance Group, who have all secured land holdings for both immediate and medium term development.”

In an emerging trend the Melbourne market is also seeing somewhat of a renaissance in the sense that strong locally based developers are competing strongly for sites when they are offered for sale.

“We have seen several local developers secure sites for new projects in the CBD and Southbank, among them Central Equity and Brady,” Mr Rutman said.

Swanston Square has been a notable high performer in the Melbourne market for some time, the site which was affectionately known by Melbournian’s as the former CUB site is likely to become home to over 4,000 residents in time.

"The Swanston Square Precinct without doubt is on the radar of a wide range of off shore developers and investors at present,” Mr Wizel added.

The International Expressions of Interest campaign for the Grocon sites will close mid to late September 2014.