Salta Properties is listing a rare Melbourne city site with development approval for a 52-storey mixed-use tower and a plot ratio far greater than anything allowed under today’s planning regulations.
It’s the second time in four years Tarascio family-owned Salta has looked to sell the 894-sq-m property at 63 Exhibition Street.
Late in 2020 and about six months after it won approval for 42 residential apartments and 225 hotel rooms in the 52 levels, Salta first listed the property, expecting to fetch up to $90 million.
The property was withdrawn.
Today, The Urban Developer understands the site and the 14-level B-grade office block upon it will sell for $75 million to $80 million.
The global real estate services company JLL is again brokering the expressions-of-interest campaign.
JLL’s director of capital markets, Nick Peden, said that despite the difference in expected selling price, development sites had held up well.
“Clearly construction costs have gone up,” he said, “and clearly interest rates have risen considerably in that time. So those two factors have definitely impacted development sites.
“But on the back end, demand for luxury, residential and hotels has also clearly gone up.”
Salta acquired the property—with frontages to Exhibition Street, Strachan and Chester Lanes, in the city’s East End—at the end of 2014.
A development application was lodged before the Victorian Government, which introduced regulations governing high-rise projects in 2016. The new controls included plot ratios, the space between buildings, setbacks from the street and the height of podium levels.
Salta won a plot ratio of about 33:1, meaning total floor space is restricted to 33 times the size of the site. The approved permit allows a gross floor area of 29,173 square metres.
Today, Melbourne’s planning controls allow a plot ratio of just 18:1.
“The location is an extremely special one,” Peden said.
“The permit in terms of the plot ratio is clearly higher than what’s allowable at the moment, under the current restrictions, so it is a very valuable asset.
“And no doubt that planning outcome is very precious.”
JLL has received about 100 registered inquiries in the week the campaign has been open.
“That’s really strong and probably fair, given the location and the public interest in it,” Peden said.
About a dozen of those inquiries have come from major international hotel chains.
“Certainly, major hotel chains are looking at it both as an operator but also as a developer,” Peden said.
“They’re probably teaming up with developers who would build it for them, and then they’d operate the hotel out of it. Or they’d buy it themselves and build and operate the hotel themselves.”
The expressions-of-interest campaign closes March 6.
