Capital Gain

Skyscraper designed to tower over the city

Melbourne's tallest skyscraper will rise from the rubble of the former Age headquarters at 250 Spencer Street as part of a redevelopment by the owners who just five months ago paid $75million for the prime city site.

Listed Hong Kong developer Far East Consortium is seeking to replace a 1.1 hectare block hugging the intersection of Spencer, Lonsdale and Little Lonsdale streets, with four towers, the tallest rising about 300 metres - or upwards of 93 levels.

At that height the proposed building would be three metres taller than the 92-level Eureka building in Southbank but about 50 metres shorter than Australia's tallest residential structure - Q1, on the Gold Coast.

Far East's 300-metre tower would also rise higher than the proposed Australia 108 building in Southbank. It is speculated that building will be approved with a reduced height limit of about 295metres (from 388 metres).

Another three towers rising between 210 and 240 metres (or about 65 to 75 levels) are earmarked for the balance of the site. The towers may be constructed above a podium with shops and offices.

The new proposal carries a speculated end value of more than $1billion. It would replace an $800 million masterplan formalised earlier this year between the site's previous owner, ISPT, and Planning Minister Matthew Guy. ISPT's proposal called for six towers between 39 and 63 levels.

Far East has in recent years been building a residential village, Upper West Side, across the road from the former Age offices, on the site of the former Lonsdale Street Power Station.

Upon completion, the $1billion UWS complex will include about 2600 flats in four towers. Architect Cottee Parker, which designed UWS, is working with Far East to redesign 250 Spencer Street.



Docklands downsizing

Meanwhile at the Docklands office where Fairfax Media relocated The Age staff in 2009, the news is that up to two more floors are quietly being offered for sublease.

After any disposal, sources say Fairfax Media may occupy just one floor of the seven-level building at 655 Collins Street.

Last year, Fairfax Media subleased three floors of Media House to NBN Co.

Sources say it is now exploring subletting another one or two floors. On offer is level two (2815 square metres) and level three (2827 square metres). If this eventuates, it will mean the retention of level seven (also on offer and measuring 2507 square metres), which is occupied by stations 3AW and Magic 693.

Jones Lang LaSalle leasing director Stuart Colquhoun suggested market rent for high-end Docklands space similar to this is about $420 per square metre per annum net.



$9.1m for former PO

A local investor is paying $9.1 million for former Prahran Post Office, developed in the mid-1850s.

The freestanding building at 168 Greville Street sold on a yield of 6.8 per cent based on the asset's annual rental return of $620,000. Three years ago the vendor refitted the building as a flash mixed-use retail and office complex with a car park.

CBRE selling agent Josh Rutman said the record low cost of debt had given investors confidence to put their funds into well-leased assets such as 168 Greville Street, which is off trendy Chapel Street.

Mr Rutman said the yield was healthy given the passive and restrictive nature of the property: though it's expected airspace will be replaced with offices long-term, the owner will face stricter than usual development controls given the heritage status.

Mr Rutman negotiated the sale with Mark Wizel and Tom Tuxworth.



Red flag stops auction

An auction organised by administrators for a South Yarra property owned by Laree Jane, former wife of race car driver Bob, was cancelled at the 11th hour.

The auction of 505 Chapel Street was scheduled for 11am on Friday but was cancelled, sources say, after last-minute refinancing. Opposite the Jam Factory, the shop is leased to Just Jeans, which pays annual rent of $140,000

Fitzroys agents Mark Talbot and Charles Emmett, who are unlikely to be paid a sales commission, declined to comment.

Last month, administrators sold a Lygon Street, Carlton, property owned by Ms Jane for $3.8 million. In August, receivers sold another of her commercial properties - a bank in Wodonga - which fetched $2.6 million.



Suites over Oliver Lane

Property partnership Marks Henderson will develop strata office suites atop a 114-year-old building in the CBD's east end.

The investment group - a partnership of former Jones Lang LaSalle directors Chris Marks and John Henderson - plans to add 1000 square metres over three levels to 18 Oliver Lane, between Russell and Exhibition streets.

The existing five-level building includes about 2250 square metres of commercial space, partly leased to the Australian Centre for the Moving Image.

Built in 1907, 18 Oliver Lane and the neighbouring Bond Store were the first buildings in Australia of conventional design made entirely of reinforced concrete.

Marks Henderson plans to sell the three new floors off the plan. The smallest suite, measuring 270 square metres, is priced at $2.45 million.

The largest office, at 420 square metres, is priced at $3.1 million.

CBRE's manager - strata commercial, Tom Tuxworth is the marketing agent with colleague Chris Pharr and Ed Wright.

Nearby the Australian Institute of Architects is developing a 21-level strata office building at 41 Exhibition Street at the north-west corner of Flinders Lane.



Clocktower offices

Walker Corporation is offering for lease a refurbished historic building near where Docklands merges with the CBD and Southbank.

The heritage Clocktower building at 1 Aurora Lane, on the north-west corner of Wurundjeri Way, includes two levels of high-end office space available as single floors (about 296 square metres) or as a whole (592 square metres). It is asking annual rent of $410 per square metre. Signage rights are also available according to Colliers International's Adam Davy, representing Walker with Edward Knowles.

The historic building once acted as administration offices for the entire Goods Shed but is now part of Walker's Collins Square project.

The Goods Shed North, in recent years occupied by troubled state government development arm Places Victoria, is also for lease in a campaign being managed by Jones Lang LaSalle.

In August, Lend Lease purchased a 2.5-hectare parcel across the road from the Clocktower. This land around the Bunjil sculpture is eventually expected to be filled with several skyscrapers on top of a podium covering a slab of the busy Wurundjeri Way.

Email: marcpallisco@gmail.com

Twitter: @marcpallisco