‘Benchmark’ Inner-Hobart Site Comes to Market

An inner-Hobart site with approval for a hotel and apartment scheme has come to market in what is being called one of the city’s most significant development opportunities of recent years.

The 3720sq m site at 234-250 Elizabeth Street is open to offers over $14 million —a substantial hike since Singapore’s Fragrance Group acquired it for just under $4 million in August of 2016.

La Vie Kelso purchased the property from Fragrance Group in October of 2021 for an undisclosed sum.

Ray White Commercial Tasmania and CBRE are handling the campaign for the site and said it was a once-in-a-generation opportunity for developers.

The site has been approved for a build-to-sell and hotel development of 49 apartments, 145 hotel rooms, six commercial tenancies and 102 carparks (renderings below).

Other possible schemes within the approved building footprint include build-to-rent configurations of up to 138 apartments or a 264-room hotel.

RWC Tasmania partner Trevor Fox said the inner-urban site was one “of real substance, with flexible zoning and live approvals that allow a developer to move quickly and potentially turn dirt within 12 months”.

In 2018 Fragrance Group proposed twin towers of 12 and 13-storeys on the site, which was not universally welcomed.

The $80-million proposal comprising a 214-key hotel and 91 apartments was refused by Hobart City Council on height and heritage grounds. It then went to mediation at the planning tribunal but did not proceed.

This was not the first time the developer had faced rejection in Tasmania’s capital—it had encountered community opposition to ambitious proposals including a 210m tower on Davey Street and a 495-key hotel on Collins Street.

Fragrance Group recently won approval for a 75-apartment project on Sandy Bay Road despite council officers recommending refusal.

In March of 2023 the next owners of the site, La Vie Kelso, won approval through the Tasmanian Civil and Administrative Tribunal for a scaled-back design that reduced each tower by six storeys and cut hotel rooms from 214 to 145, and apartments from 91 to 49.

CBRE director David Minty said Hobart’s undersupplied housing market pointed to a need for alternatives, including build-to-rent.

“This site gives developers the chance to lead with a model that’s already gaining support on the mainland,” he said.

The property generates holding income of $180,628 a year from existing heritage buildings, including the historic Kelso Terrace, built in the 1850s.

The site has archaeological significance with connections to colonial figure George Augustus Robinson and includes buildings on the Tasmanian Heritage Register.

The site within the Central Business zone has dual access via Elizabeth and Warwick streets and is close to major infrastructure, including the University of Tasmania’s city campus.

It could also potentially benefit from momentum around the proposed AFL stadium and Macquarie Point development.

RWC Tasmania partner Claude Alcorso said the site was “flanked by high-value, future-focused development” and with the right project “could become a vital connector between the city and emerging precincts like the University of Tasmania’s city campus”.

Burgess Rawson Victorian partner Matthew Wright said the timing aligned with national attention on Hobart’s growth trajectory.

“There’s real potential here to set a benchmark for what modern city living could look like in Tasmania,” he said.