Developer hires Gillard's man to sell apartments

Ubertas Group plans to demolish a two-level office building at 330-360 William Street and replace it with one of two high-density proposals, which the government says because of the development's proposed scale Planning Minister Justin Madden must approve.

The biggest proposal being considered is for a 50-level complex with 626 apartments, but earlier this month a relatively smaller proposal, of 35-levels and including 476 apartments, was submitted to the minister for consideration, a spokeswoman for Mr Madden's office said.

Ubertas made headlines in November when it appointed Mr Mathieson, who had no real estate experience, to a position marketing luxury apartments, increasingly to international investors.

Ubertas managing director Albert Dadon admitted he did not know Mr Mathieson before 2007, but plans "to make him a property star" as he has others in Ubertas, who were also appointed without experience.

Mr Dadon confirmed he spent New Year's Eve with his "close friends" Kevin Rudd and Therese Rein, and finds Mr Mathieson "personable with great manners".

"As far as I'm concerned, we're a private company and I can employ whoever I want," Mr Dadon said.

Coincidentally it is the Rudd and Gillard government's controversial relaxed laws related to foreign real estate ownership that is driving demand for apartments, particularly near Queen Victoria Market.

Mider owner and director Anton Wilson, who is building three major apartment projects and a hotel next door to the proposed Ubertas tower, has limited overseas investment to just 25 per cent of units at his Infinity 8 project.

But he told Capital Gain that given demand, about 75 per cent of apartments in the project could have sold to international, mostly Asian-based, investors.

He said that before the relaxation of prohibitive ownership laws, overseas investors bought about 30 per cent of new CBD apartment projects.

A spokeswoman for Mr Madden said a decision about the 350 William Street proposal had not yet been made.

The state government, like the Victorian Civil and Administrative Tribunal, has used the contentious Melbourne@5 Million planning strategy, which replaces the Melbourne 2030 strategy, to approve many high-density apartment projects on the grounds that they will help accommodate a booming population and create jobs.

Last year, another Australian Labor Party heavyweight, federal Health Minister Nicola Roxon, employed Mr Mathieson as one of the government's five men's health ambassadors.

CBD eyesore to go

LOCK the date into your diary: 2015 should see the demolition of one of the CBD's more prominent eyesores.

The spectacularly located, mission brown, 35 Spring Street office building, opposite Treasury Gardens, may cease functioning as an office, 41 years after it was built.

The vendor, the Over Fifty Direct Property Trust, will sell the building with plans for a predominantly glass, 39-level, 165-unit apartment complex.

That tower is expected to rob parkland and eastern-suburbs views enjoyed by tenants at AMP's Collins Place buildings at 35 and 55 Collins Street, until now the tallest buildings along the south-eastern rim of the CBD.

The 35 Spring Street office is fully leased to the state Finance Department, which pays annual rent of $4.1 million to occupy the 12,984-square-metre office on a lease with no renewal options.

The building was one of several offloaded by the state government in a 2003 sell-off that also included a car park at 522 Flinders Lane and 555, 567 and 595 Collins Street.

Over Fifty paid $35.4 million for 35 Spring Street.

Even at the time of sale and before the concept of CBD living was as accepted as it is now sources speculated that 35 Spring Street, on the corner of Flinders Lane, would be best suited as apartments.

Immediately across the road, at 31 Spring Street, a former 12-level Telstra office was converted into a 25-level luxury apartment tower in about 2000, while one of Melbourne's earliest high-rise apartment buildings was developed in the 1980s at 99 Spring Street.

CB Richard Ellis and Colliers International are marketing 35 Spring Street, which is expected to fetch about $45 million.

Retail therapy

THE Australian Retailers Association which commonly appears in the mainstream media encouraging people to spend is now cashing up, by listing for sale its long-time headquarters at the top of the CBD.

The ARA can expect to make about $5 million for the three-level, B-grade building, which, because of a ground-floor retail lease, is expected to attract investors and owner-occupiers who may wish to rent or occupy about 1040 square metres on the upper two levels.

Given the site's proximity to RMIT University and frontage of 13.4 metres, it is also expected to arouse interest from residential developers.

Kliger Wood's Grant McKenzie is marketing 104-106 Franklin Street. The ARA recently relocated to 136 Exhibition Street, where it is a tenant.

Terminus sale ended

ABBOTSFORD's prominent green Terminus Hotel has sold to an owner-occupier for a price speculated to be about $5.5 million.

The pub, often touted as being in Richmond because it sits at the suburb border (Victoria Street), was sold by Jones Lang LaSalle's Mathew George in an off-market campaign.

The Terminus is the latest in a string of pubs to be put up for sale recently. Earlier this week at auction, Burgess Rawson and CB Richard Ellis offloaded four Melbourne pubs: the Eltham Hotel for $7.9 million; Essendon's Royal Hotel for $6.8 million; Glen Waverley's Mountain View Hotel for $10.9 million; and the Westmeadows Tavern in the north-west, for $4.4 million.

These pubs were sold by Australian Leisure & Hospitality Group, co-owned by Woolworths and pokies king Bruce Mathieson.

Holding pattern

HAVING reported a strong

half-year profit of $51.5 million this week, Flight Centre has confirmed it will hold on to a St Kilda Road office it bought at the peak of the commercial property boom in 2007, and then renovated.

Flight Centre's Haydn Long confirmed the group would retain the 11-level office it occupies and leases to tenants, at 436 St Kilda Road.

The building was put to the market last April with a price tag of between $25 million and $30 million, and after the economic downturn had grounded property markets.

Office building values in St Kilda Road are being preserved, sources say, because of strong site sales recently to residential developers, which are proposing much higher residential buildings than the boulevard has seen.

St Kilda Road has often been criticised by office tenants for not having a railway station, or ground-floor shops.

Housing in a hurry

IF YOU think the number of social and affordable houses is swelling around Victoria, you're right.

The federal government is in a rush to build 80,000 homes before 2012, with many developers modifying former proposals to include a "percentage" of social housing units among their designs.

Sources say developers are doing this in the hope of speeding through a planning approval, while at the same time satisfying a project's financier and taking the pressure off the government to build public housing on its own land.

And it seems to be working.

Read Sunday Domain tomorrow for details of two major proposed residential projects including a

$160 million public and private housing development in Melbourne's

north-west, construction of which could begin by April.