Capital Gain

Vertical integration in CBD uni's near future

Vertical integration in CBD uni's near future

Victoria University plans to consolidate its two city campuses, spread across six sites, to a new high-rise building overlooking the historic former Melbourne Mint.

The college, which in late 2011 banked $28.2 million from the sale of a CBD car park - the lower levels of a campus at 300 Flinders Street - has lodged plans to build a 32-level tower at 372-378 Little Lonsdale Street, a site it bought for $3.1 million in 2001.

The proposed 43,000- square-metre vertical campus is speculated to include about 11,250 sq m of office space, spread across 13 levels. Fifteen floors will be fitted as lecture theatres and classrooms, with the balance for building services, parking and shops, some that will open onto Sampson Lane.

The VD Womens Clinic building, developed about 1908, will form part of the lower levels of the proposed building, which is to be branded VU Tower.

Longer term, the university plans to build a second tower on neighbouring airspace above the Land Titles Office Vault. Victoria University has already turned into campuses the former Records Office and adjoining Records Office Vault.

Gary Carter, director of facilities at Victoria University, said some parts of the planning request might change, including the office component. "The new building will allow the university to consolidate a number of existing CBD facilities,

provide a purpose-built education facility and help to reinvigorate that part of Melbourne," he said.

If constructed, VU Tower occupants would enjoy views across the heritage protected former Royal Mint precinct, much of which is an open-air car park

The 135-metre building would block views from the exclusive 36-level Republic Tower at 299 Queen Street, the project said to have kicked off Melbourne's high-density development boom when it was developed in 1999.

Queue at Kew Junction

More than 100 people packed Kew Junction on Thursday to see a prominent office sell to an investor at auction for $10.25 million.

The sale price for 17-27 Cotham Road translates to a market yield of 8.4 per cent. The reserve for the four-level, 2721-square-metre building was set by administrator Taylor Woodings at $9.5 million.

Four bidders contested for the asset, owned by high-profile healthcare identity Ian McGoldrick. Developed in 1984, the building sits on a 2961 sq m block with 91 car parks.

"This was an absolute prime opportunity to secure a hassle-free office investment in an unbeatable busy Kew location, and as expected, it enticed buyers out of the woodwork," said Colliers International director Jeremy Gruzewski, who sold the property with Peter Bremner and GormanKelly's Robert Kelly and Sandro Peluso.

Mr Kelly said demand for high-quality office space in the inner-eastern suburbs had improved this quarter, with the supply of space to lease and purchase in decline.

Early tower on block

A trophy asset in central Collins Street is set to be sold for the second time in its 41-year history - and contend for the title of this year's biggest CBD office sale.

The former Commonwealth Bank of Australia building at 367 Collins Street - now known as the Optus Centre - is expected to sell for about $200 million.

On a large 3475-square-metre block, with development potential above low-rise airspace, the asset is controlled by Colonial First State Global Asset Management on behalf of the Direct Property Investment Fund office portfolio, a closed-end wholesale fund which has reached maturity. A CFSGAM representative confirmed speculation the asset

would be listed for sale soon.

DPIF paid $98 million for the 37-level, 37,250 sq m A-grade tower in 1996. It was owned since construction

by Commonwealth Bank.

The asset includes a 230-bay car park accessed from Flinders Lane.

Stonnington record

Stonnington Baptist Church has accepted an early offer of $2.9 million for an Armadale property it planned to sell after the conclusion of an expression-of-interest campaign a week later.

Occupied by the Salvation Army from 1889-2005, 73-75 Union Street sold to a developer planning to build high-end apartments on the site.

The 787-square-metre block includes a 600 sq m building with three offices, congregation, seminar and conference rooms. Melbourne Acquisitions director Dominic Gibson, who sold the asset, is now leasing it.

He said the result of $3685 per sq m was a record for residential land in the area.

Masters goes off site

Woolworths-backed hardware chain Masters has decided against buying what is considered the best site within the 240-hectare Fishermans Bend precinct, Australia's biggest urban infill project.

Known as 11 Montague Street, opposite the South Wharf complex, and identified as an open-air car park, the site is within walking distance of Docklands, Southbank and the CBD. Any high-rise development would offer spectacular Yarra River views over the Melbourne Exhibition Centre.

Woolworths - which like rival Bunnings has in recent years made headlines for playing property developer - told Fairfax Media it was no longer interested in the site, which it agreed to buy in late 2011 from Melbourne businessman Gabor Hubay.

In Melbourne's east, Bunnings is seeking approval to build a 389-unit complex abutting Westfield Doncaster that was incorrectly reported last week in Capital Gain as a permitted 350-unit project.

50 bids on office-shops

A historic mixed-use complex at 694-696 Glenferrie Road, Hawthorn, has sold for $5.62 million.

The fully leased asset includes three shops and eight refurbished office suites and returns $255,000 in net annual rent, according to selling

agent Pat Burke of MP Burke Commercial, who sold the asset with Michael Pound.

More than 50 bids were received at an auction after the property was announced on the market at $5 million. The sale values land in the shopping strip at about $17,729 a square metre.

BlackRock sells

Four months after telling Capital Gain that it didn't plan to sell the building, BlackRock has offloaded 615 St Kilda Road.

Home for years to Tatts Group, and soon to be fully occupied by Cancer Council Victoria, the office in Melbourne's inner south sold for about $29.5 million, according to sources.

It is believed the 8500-square-metre building needs about $6 million in repairs and refurbishments once Tatts quits in August. Cancer Council Victoria will pay a starting annual rent of about $2.8 million.

BlackRock withdrew 615 St Kilda Road from sale last year when price expectations of about $24 million were not met. After securing the new tenant, the office was relisted for sale earlier this year by Jones Lang LaSalle's Robert Anderson and James Kaufman and Colliers International's Nick Rathgeber and Leigh Melbourne.


Twitter: @marcpallisco

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