Back to the bar for chambers at city's legal heart

BCL, which is owned by the Victorian Bar Council, has paid $54 million, plus GST, for the Owen Dixon Chambers West office building at 525 Lonsdale Street, which it has occupied since 1986.

The purchase marks the end of a tumultuous, 30-year association between the site and BCL, which among other things, aims to provide members of the bar with accommodation in close proximity to the courts.

BCL purchased the land on which Owen Dixon Chambers buildings were built in 1979, for $1.85 million, but did not have the resources to develop offices on the site immediately.

To enable office construction in 1986, BCL signed a 40-year sublease with financier Perpetual Trustees, to occupy the entire 19,000-square-metre ODCW office, with an option to purchase the building in 2026.

But because of a ratchet clause in the sublease arrangement, BCL paid $2.5 million to terminate this lease in 1995 and surrender its future right to buy the asset in return for an immediate 40 per cent rental discount, back to market levels.

The building was later sold to an AMP Capital Investors-controlled client.

The neighbouring Owen Dixon Chambers East office - which is connected to ODCW - has been owned by BCL for some years.

"We are very pleased to have been able to fulfil the long-standing ambition [of BCL]," said Michael Colbran, QC, chairman of the Victorian Bar. "This purchase releases the bar from constraints as a tenant of a commercial building. Importantly, it means security of tenure of chambers provided by the bar that are close to the courts for current and future generations of Victorian barristers.

"The acquisition will strengthen and consolidate the asset base of the bar and facilitate the long-term expansion of BCL."

The group owns several other offices in the area, including Douglas Menzies Chambers and Isaacs Chambers, but ODC has always been considered the heartland of the Victorian bar.

An AMP spokeswoman said settlement was expected to occur later this month.

Brussels spouts

SYDNEY-BASED developer Stockland is understood to be slicing and dicing a prominent development site it purchased off Vision Australia two years ago for $28.3 million.

Sources say Stockland is close to selling the bluestone Ormond Hall building, which accommodates drinking institution the Belgian Beer Cafe, to the pub's operator but this could not be confirmed.

Stockland had once intended to redevelop the prominent building into a boutique hotel, retaining the tenant as part of any redevelopment. But it's understood the developer is instead selling the rear portion of its 557-563 St Kilda Road site for about $7 million, after undertaking an extensive renovation, which is speculated to have cost up to $2 million.

The front part of the block, known to many Melburnians as the Belgian Beer Cafe forecourt, is also believed to be on the market as a residential development site. Sources speculate this site could fetch around $20 million.

Stockland will sell this portion of land with a development permit for a 23-level, 258-unit apartment complex near The Alfred hospital border.

On the Pace

BRIGHTON-BASED builder Pace Developments has paid $5.1 million for a collection of offices and warehouses overlooking Dandenong Road.

The 11-17 Wellington Street properties cover 1250 square metres, and offer a second street frontage to Nelson Street.

The six buildings on the site will be demolished and replaced with a six-level apartment tower with more than 100 units, offering views over Albert Park Lake towards Port Phillip Bay and the CBD.

Kelemen Commercial marketing agent Andrew Egan said the sale price equated to a strong land value of just over $4000 per square metre.

A campaign to sell the collection of sites last year fell through.

One of the biggest recent sales in the immediate area was in July 2008, when Orchard Diversified Property Fund sold the 2800-square-metre 3 Wellington Street office with prominent frontage to the frantic St Kilda Junction for just over $10 million.

Earlier this year, Pace Developments paid $6.15 million for Murrumbeena's former Christian Guest House at 51 Murrumbeena Road, which has been sold five times in the past 10 years. That 5290-square-metre site is earmarked for a four-level, 100-unit apartment project.

Data demolition

ANZ'S former data centre building in Toorak Road is to be demolished and replaced with a $100 million luxury apartment tower.

Stonnington City Council this week approved the demolition of the 227 Toorak Road office, which ANZ sold for $33 million in 2007 to Little Project Developments, the construction company of Toll Holdings chief Paul Little.

Under the redevelopment, all Toorak Road car access will be closed off permanently. The apartment tower that will replace the ANZ office will be set back 45 metres from the road.

LPD managing director Michael Fox told Capital Gain the "hard work" with council's planning officers paid off.

Nearby the council recently rejected a 35-level apartment proposal by Sydney-based developer Stockland at 2-4 Yarra Street, and a 38-level tower for the Capitol Bakeries site on the corner of Toorak Road and Chapel Street. However, the Victorian Civil and Administrative Tribunal approved the Capitol redevelopment in a landmark case earlier this year.

THANKS to readers who have gone out on a limb to be an "industry source" this year. Capital Gain will return on January 23 next year.

CORRECTION

A private developer with a similar company name to one used by Phileo Australia is the owner of a Rhyll caravan park reported in this column last week.