Bitter bidding war likely for Ansett asset
THE falling-out of two of Melbourne's biggest private developers will be played out publicly at the end of the month when agents auction a landmark city office building on court orders.
THE falling-out of two of Melbourne's biggest private developers will be played out publicly at the end of the month when agents auction a landmark city office building on court orders.The imminent sale of the former Ansett headquarters at 501 Swanston Street, for a price expected to surpass $50 million, is also fascinating those within the real estate industry for being likely to smash the record price paid for a CBD office at auction.Interestingly, each of theco-owning vendors of the building, Vince Giuliano, head of PDG Corporation, and Mario Salvo, director of Salvo Property Group, is expected to bid for full control of the asset.The consortium has recently developed apartments on land adjoining the 18-level, hexagonal building, which was re-leased to tenants after Ansett went into voluntary administration 10 years ago.Renowned for its views, the building has great redevelopment potential, but has been retained by the owners as an investment. It is near a site in Carlton that in 2010 was earmarked to become a 90-level, 800-unit apartment building.Densities in Melbourne have loosened even more since 2010, with 501 Swanston Street touted by some industry players as a possible site to accommodate Melbourne's first 100-level-plus building.It is believed that after a recent dispute between the owners, the courts concluded that 501 Swanston Street be auctioned, despite agents arguing that an expressions of interest campaign may have been more appropriate.Agents tell BusinessDay the highest-priced office building to sell under a gavel in recent memory was in 2007, when serviced-office operator Christie Corporate paid $17.8 million for an unrenovated 11-level office at 454 Collins Street.An advertisement for 501 Swanston Street, not mentioning the address, is being circulated to potential buyers. The auction will be held at the Rialto boardroom of agency CBRE at midday on May 29. Mark Wizel, Martin O'Sullivan and Mark Coster are the marketing agents.The Ansett portfolio purchase with PDG was Mr Salvo's first foray into major property development.Mr Salvo had previously founded successful rental company Europcar, which was an owner-occupier in many of its inner-city showrooms.New life for farmTHE owners of a 26-hectare Phillip Island farm, until three years ago owned by AMP Capital Investors and earmarked to become a retirement village, have applied to Bass Coast Shire Council to remove the entire aged-care component of the proposal.The owner of the site paid AMP a reported $8 million for the Ventnor Road block and a permit for a 184-lot residential subdivision.A major aged-care complex and community facilities were required to be developed as part of that permit. However, the council will now decide on whether to issue a new permit resulting in the entire farm, about three kilometres south-west of the centre of Cowes, being subdivided into 304 standard residential lots.Blocks within the housing estate to be known as WhyteSands have been for sale since early last year.It is competing for limited buyers with several new housing estates recently permitted for development in Cowes, including one controlled by Sydney giant FKP.AMP originally planned to replace the farm with a 195-lot aged-care village but changed its mind after former health minister and now Attorney-General Nicola Roxon confirmed she would shut the island's only hospital, rather than honour a $2.5 million lifeline offered by the Howard government.Around the cornerA LOCAL private investor has paid $10.75 million for a historic property at thesouth-west tip of the CBD.The former Sir Charles Hotham Hotel, later rebranded the Hotham Private Hotel, and now the All Nations Backpackers, occupies sites at 2-8 Spencer Street and566-580 Flinders Street, near the Yarra River.On an 833-square-metre site, the property has been offered for sale at various stages over the years, but a lease expiring in 2018 is believed to have deterred residential developers.It is expected that the new owner of the property will use the time the asset is returning an income to propose a landmark residential redevelopment.All Nations pays annual rent of about $885,586 to occupy the five-level art-deco building opposite Crown Casino. On that basis the sale price reflects a yield of about 8.2 per cent. Kliger Wood's Grant McKenzie and Russell Meerkin were the marketing agents.River lifeANOTHER chunk of former industrial land in Kensington is on track to being replaced with apartments.At 1-89 Hobsons Road, abutting the Maribyrnong River, and between the train line and Lynch's Bridge, five hectares of land belonging to six separate owners has been rezoned to allow for mixed-use redevelopment.The land is diagonally opposite a 15-hectare Footscray parcel across the Maribyrnong River known as the Joseph Road precinct, which has recently been earmarked for intense apartment development.The Kensington rezoning cites the former government's defunct Melbourne 2030 planning policy, which aimed to replace industrial sites near public transport with high-density housing.Hobsons Road is near the South Kensington railway station and Kensington Banks housing estate, which was built on the site of an abattoir and army depot site in the 1990s. It is also close to Flemington Racecourse.Fuelling expansionA PORTFOLIO of four Freedom petrol stations in Gippsland has sold for $7.6 million to United Petroleum, which will be an owner-occupier.The most expensive asset, a 1812-square-metre station overlooking Western Port in San Remo, South Gippsland, sold for $3.59 million. The other stations are in Churchill, Traralgon and Newborough.In conjunction with these property sales, a 14-site retail network of Freedom Fuel stores also sold to United Petroleum for an undisclosed price.The service stations in Gippsland, the Latrobe Valley, and in Melbourne's Burwood and Kew will also be rebranded, adding to almost 300 stations United operates nationally."Intervention by the ACCC, who were concerned about competition issues, delayed settlement by three to four months," selling agent Ron Newton of Ronald A Newton and Associates said.Some deals took more than a year to finalise, he added.$6.5m for water landMELBOURNE Water can expect about $6.5 million from the sale of a development site on the corner of Colemans and Frankston-Dandenong roads in Dandenong South.Being offered with vacant possession, the site is spread over 5.5 hectares and includes about 4000 square metres in building improvements. Knight Frank selling agents Martin Bourke, James Templeton and Adrian Garvey are marketing the site.Last year Melbourne Water successfully rezoned two hectares of land abutting the Arthurs Seat State Park in Dromana in a move expected to see the site attract residential firstname.lastname@example.orgTwitter: @marcpallisco
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free