College hedges its bets under new government

Local agency sources expect the college will reap about $16-$20 million from the sale of the 5471-square-metre site, which is being marketed as a multi-level development site at lot 1, 597 St Kilda Road.

Most of the space is an open-air car park with frontage to (the less exclusive) High Street, just west of Punt Road. The precinct is classified as Melbourne, with postcode 3004. But many occupants of the area, including Wesley and The Alfred hospital, also classify their addresses as Prahran.

The college just squeezes under the control of the City of Melbourne Council, which has recently proven more adventurous in regard to redevelopment than neighbouring councils Port Phillip and Stonnington.

But under the stewardship of new Planning Minister Matthew Guy, and given the Baillieu government's mandate to curb rampant and random tower redevelopment, it's not yet known how the site will be received by developers, especially in a market that agents agree has been in downturn for some months.

The college is hedging its bets, also marketing the site for sale or lease as a school or hospital. Kliger Wood's Nick Breheny and Eugene Wood are the marketing agents.

Elsewhere in the area, Evolve Development plans to replace the former Suntory restaurant at 74 Queens Road with a skyscraper of 200 units or more.

The Peloton Group also plans to replace one of the precinct's last historic mansions, at 70 Queens Road, with Proximity, a 12-level complex with 159 apartments.

And at 541 St Kilda Road, next door to The Alfred, developer Hudson Conway is planning a 258-unit apartment tower on land it bought for about $20.5 million from Stockland in March.

Bendigo building up

IT'S the kind of development you'd expect to see approved in King Street, in the city.

But instead, plans are afoot in central Bendigo for a multi-level, 420-bay car park and office building at one of the city's busier intersections.

The city council this week approved a $15 million redevelopment of an open-air car park bound by Edward, Queen and King streets.

The project will include a 1500 sq m office, pre-committed to government agency State Trustees, which also has naming rights.

Construction of the complex is to start in July and take 11 months. It will continue a trend of office redevelopment within the precinct. About six years ago, another office leased to the government (DHS) opened across the road from the proposed building.

The precinct's most prominent office, the award-winning Bendigo Bank headquarters, opened in 2009.

MAB's multiple plans

MAB Corporation plans to build a $60 million business park at a Port Melbourne site it bought last month from the former Brumby government.

The St Kilda Road private developer, which at one stage was linked to buying Doncaster's Eastern Golf Course, says it expects to lodge redevelopment plans for its new Cook Street site by the middle of this month. Settlement on the Port Melbourne property is due on January 7, 2011.

MAB commercial and industrial general manager Richard Johnston says the former VicRoads toll collection centre for the West Gate Bridge has a 500-metre frontage to the West Gate Freeway, and passing traffic of some 160,000 vehicles a day. A third of the 3.1-hectare site will be redeveloped as a fuel exchange with an associated diner.

A portion of the site will be subdivided as land lots between 1000 and 3500 square metres and offered for sale.

MAB is also seeking to build office warehouses on the site, which it will lease and retain as investments.

Jones Lang LaSalle directors Lincoln Reynolds and Ashley Buller negotiated the $12.65 million sale for the former state government and are acting for MAB, marketing the redevelopment.

Queen St history sells

QUEEN Street's historic Lombard Building sold to a private investor at auction yesterday for $9 million.

Recognised by Heritage Victoria as one of the city's first office blocks developed with passenger lifts, the extravagantly designed eight-level, 2370 sq m building sold on a yield of 6.5 per cent, based on the asset's annual income of $588,000. The Lombard Building was built in 1888.

Savills directors Clinton Baxter and Nick Peden received 67 bids from five bidders, before 15-17 Queen Street sold to a Melbourne investor.

In July, another historic CBD building at 167-173 Flinders Lane sold for $13.31 million to businesswoman Carol Schwartz.

In May, developer and investor David Marriner paid the Church of Scientology $8.5 million for its historic headquarters on the north-east corner of Flinders Lane and Russell Street.

Office it was and is

AUSTRALIAN Unity has sold another Melbourne property, this time in the bayside suburb of St Kilda.

The prominent black office at 180 St Kilda Road was occupied for years by Austereo as the studio headquarters of radio stations Fox FM and Triple M.

Austereo recently relocated to a new state-of-the-art facility in South Melbourne, but sublet its offices at 180 St Kilda Road, where it is committed until June 2014.

Based on the building's annual rent of $854,000, and sale price of $10 million, the asset sold on a yield of 8.5 per cent.

The office measures 2956 square metres and includes a 61-bay basement car park and residential redevelopment potential.

But the new owner has no plans to change the building's use as an office, according to Jones Lang LaSalle selling agent David Butera.

This differentiates the site from other commercial properties sold in the suburb this year, and which are now being marketed as apartment projects, namely the former St Kilda post office and the former Zagame dealership and cafe on Fitzroy Street.

In March, Australian Unity sold its Footscray Plaza Shopping Centre to developer Banco Group for about $20 million.

What might have been

IT MUST be with a great deal of despondency that former members of the recently defunct Naval & Military Club "keep under surveillance" what is happening at their former headquarters, at 27 Little Collins Street.

The mission-brown building was sold by receivers to Chinese developers during the economic downturn. That came about after a series of legal disputes prevented the club from organising a joint venture partner to redevelop the site into a club room,

hotel and apartment tower.

The Naval & Military Club's proposed redevelopment was expected to save its future - and indeed, give it an income stream that would have allowed it to grow. But instead the club collapsed and private developer Golden Age picked up the site for a bargain $10 million last July.

Golden Age has since proceeded with plans to redevelop the site into something similar to what the club had proposed (and which the neighbouring Melbourne Club famously opposed).

It told Capital Gain this week that 80 per cent of apartments in the 32-level tower had been sold, allowing construction to start within weeks. A total of 188 dwellings over 17 levels were available for sale to investors. Colliers International marketed these units.

Another 170 accommodation rooms, as well as a day spa, pool and signature restaurant, will occupy the remaining 15 levels, to be managed by boutique hotel operator Sheraton.

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