Capital Gain

Dodo founder cashed up for second strike

Dodo founder cashed up for second strike

Melbourne's newest developer, Dodo founder Larry Kestelman, has made his second major property play.

Kestelman is believed to have spent $21.35 million on an inner-city office building on a 2323 square metre block with development potential and view security of Port Phillip Bay.

Number 10 Queens Road, at the north-eastern edge of Albert Park Lake, walking distance to the Royal Botanic Gardens, includes a 19-level building with about 9000 square metres of B-grade space, potentially able to return about $2.3 million in annual rent.

Owners of other properties in Queens Road and St Kilda Road have recently replaced old office buildings with swank apartment towers.

Mr Kestelman's site is capable of accommodating more than one large building.

The entrepreneur is cashed up after selling his interest in Dodo to M2Communications for a reported $150 million.

Knight Frank commercial sales director Marcus Quinn and colleague Langton McHarg declined to comment about the deal. The property, which sold days after an expression-of-interest campaign closed, was expected to fetch about $20 million. In February, a rundown office at 14 Queens Road sold for $13 million.

Last month Mr Kestelman paid $9.35 million for a property at 300 Toorak Road with approval for a six-storey, 76-unit apartment complex. The vendor, racing commentator and property developer John Rothfield, unsuccessfully lobbied council to replace it with a 12-level, 114-unit complex.

Taking bets in Box Hill

A Hong Kong-based family has made just over $5 million selling a commercial property at one of Box Hill's most prominent corners.

More than 180 people braved rainy conditions on Thursday at the auction of 587-589 Station Street, at the north-west corner of Main Street.

Leased to Tabcorp and a dental clinic, the 331-square-metre double storey building is on a 205-square-metre block and has a 25-metre frontage to the Box Hill Shopping Mall.

Pat Burke of MP Burke Commercial said the property sold on a yield of just 2.95 per cent, which he believes to be a record for the area. He said the auction generated more than 100 inquiries.

The deal reflects a high $24,400-per-square-metre land rate, according to the other selling agent, Michael Pound.

"This is an incredible result which demonstrates an ongoing pent-up demand from private local and offshore investors capitalising on the historically low interest rate environment", Mr Pound said.

Food comes first

Sydney-based developer Mirvac has sold a new retail property within its $1 billion Harcrest project, built on a former quarry in Melbourne's south-east.

The IGA-leased supermarket within the Harcrest Shopping Village sold for $3.65 million representing a yield of 7.37 per cent. IGA's 15-year lease started in September 2012.

About 25 kilometres from the city, the supermarket is on the corner of Harcrest Boulevard and busy Stud Road - at the entrance to a master-planned village that is expected to accommodate 2000 residents in about 850 dwellings.

Andrew Greenway from Gross Waddell and Fitzroys agent James Lockwood said seven inquiries were received. "This strong result reflects market interest in retail investment property that offers a long-term lease commitment," Mr Lockwood said.

In 2011 Mirvac successfully urged council to extend the boundary of Wantirna South to capture a 40-hectare portion of the site zoned as Scoresby, a suburb that carries cheaper land values. In 2008, it paid Austral Bricks about $100 million for the 56 hectare former quarry.

Previously, Mirvac agreed to pay $100 million for the 47-hectare Eastern Golf Club in Doncaster - expected to make way for another $1 billion master-planned village, but with high-density residential and office buildings. The club will move to a new course at Yering, 22 kilometres to the east.

Plans in Prahran

ASX-listed developer Watpac has sold a Prahran site it bought almost three years ago for $6 million.

Watpac bought 20-30 Chatham Street from the Avery family, who owned it for 60 years. It is understood to have sold for about $8.5 million this time around.

Just west of an intersection with Chapel Street, the double-storey building, for years identified by its ground level graffiti, is opposite a Safeway supermarket car park. Watpac was expected to develop the 960-square-metre parcel with an apartment tower and ground floor shops.

Watpac's first Victorian project is about 100 metres away. Rue de Chapel included 84 flats atop a retail building.

Elsewhere in the immediate area, plans are mooted for a residential building near the supermarket and the Prahran Market on Commercial Road.

On Greville Street, opposite the Prahran Station, the Saade family is incorporating the historic Station Hotel into a medium-density apartment complex rising six levels behind a three-level street front.

Ex-minister dives in

Former planning minister Justin Madden might find his electorate's next planning battlefield is just a few hundred metres from his home, with large city developer Hallmarc buying a prominent site in one of Moonee Ponds' best residential streets.

The former Hillebrands tennis training centre at 20 Park Street was offloaded by exclusive girls' college Lowther Hall Anglican Grammar School, which paid $3.2 million for it in mid-2010. It listed the 2000-square-metre block earlier this year after the school council decided it was too far from Lowther's main campus in Leslie Road, Essendon.

With access to a second street, the site was formerly configured with three tennis courts and a clubroom. It was mooted for a full restoration. The site is now expected to make way for an apartment complex with an end value of about $40 million, according to sources.

Nelson Alexander Essendon's Matthew Febey and Milo Rasinac were the marketing agents.

Not far away at the Moonee Valley Racetrack, Mr Madden has been campaigning against plans to build several 25-level apartment buildings on a portion of the site closest to the Puckle Street retail strip.

Mr Madden paid to create signs now posted in hundreds of front yards surrounding the racetrack in Moonee Ponds, Essendon and Brunswick West.

Hallmarc develops office, industrial and residential property.

In the south-east, the developer is building a high-density village on a Nepean Highway site near Southland. It recently purchased a development site about two kilometres south of the CBD in the precinct known as Melbourne with postcode 3004.


Twitter: @marcpallisco

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