A commercial carpark in West Melbourne has sold for about $25 million to Chinese developer Holder East in hopes that the land will capitalise on a misunderstood market.
The 1,877 square metre corner site at 496-508 La Trobe Street, which has been under the ownership of an Indonesian syndicate for the past 15 years, marked Melbourne’s first carpark listing of 2017.
Colliers International’s David Sia, Daniel Wolman, Oliver Hay and Matt Stagg negotiated the deal with Thomson Geer partner Eu Ming Lim, who represented the vendor.
Holder East said they had plans for a residential or office development to activate the area, having witnessed the success of new developments Haileybury City campus and Far East Consortium’s West Side Place in close proximity.
Mr Sia said Holder East had been approached in regards to a substantial pre-commitment opportunity in the area prior to its acquisition of 496-508 La Trobe Street, strengthening its motive to buy.
“The syndicate had no intention of developing the site and saw the rising land tax bills and fear of oversupply within the market as reasons to part ways with the asset,” he said.
“Given the promising outlook for West Melbourne, Holder East understands there are some lumps in the market but does not endorse the notion of an oversupply in the city’s apartment marketplace.
“It saw this substantial carpark as a solid opportunity to capitalise on the currently misunderstood market.
“The site offers genuine flexibility given the lack of amenity in the area, providing the purchaser extensive options of hotel, education, office or residential upside.”
Mr Wolman said the future activation of the carpark would stimulate and contribute to the revitalisation of the city’s northern fringe.
“The precinct is dramatically evolving in response to the inner-city demand,” he said.
“The strong investment in residential, commercial and infrastructure projects is a testament to this.”
City of Melbourne’s draft structure plan for West Melbourne is due mid-year, with recommendations including the revolutionary extension of the Spencer Street transport “spine”, bringing trams as high as Drybugh Street and engaging with North Melbourne station.
About 1,300 new residents have moved into the West Melbourne precinct in the past five years, with a further 20,000 forecast in the next 20 years. The suburb also houses the CBD’s first prep-year 12 school, Haileybury City.