Developer thinks big for Fishermans Bend

Boutique developer BPM - backed by members of Melbourne's wealthy Knowles family - is the latest builder to invest in Australia's biggest urban infill project, Fishermans Bend.
By · 30 Nov 2013
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30 Nov 2013
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Boutique developer BPM - backed by members of Melbourne's wealthy Knowles family - is the latest builder to invest in Australia's biggest urban infill project, Fishermans Bend.

BPM has quietly secured a single-storey factory at 165-167 Gladstone Street and lodged an application with Planning Minister Matthew Guy to replace it with what would be its biggest project yet - an 18-level building with 90 flats but 52 car parks.

Established in 1996 by young entrepreneur Jonathan Hallinan, BPM has so far focused on low-density apartment products, initially around Brighton but recently in more affordable blue-ring suburbs including Essendon and Fitzroy North. It has lately developed interstate and in China too.

Seventeen applications to build more than 25 apartment towers have been lodged for Fishermans Bend since 240 hectares in Port Melbourne and South Melbourne were rezoned last July.

While many affected land owners admit they plan to sell sites once they have obtained valuable permits, other builders, including BPM and Vicland, intend to develop the precinct's first dwellings once permits can be obtained.

Vicland, owned by Melbourne businessman Bill McNee, hopes soon to start Fishermans Bend's biggest proposal - a $1 billion, 1600-unit village with four skyscrapers, including twin 53-level towers that would stare down on the Melbourne Exhibition Centre and the Yarra River.

BPM is marketing on the "upcoming" section of its website a South Melbourne project penned by designers of buildings in another large-scale urban infill project, New York's Meatpacking District.

Sweet price

A shopping arcade in Camberwell's ritzy Burke Road shopping strip sold to a local private investor this week for just over $13 million - almost twice the price the vendor paid for it 12 years ago.

The Chocolate Box Centre at 761-767 Burke Road is two-thirds leased to ASX-listed retailer Kathmandu. The 1457-square-metre building on a 1117-square-metre block has housed The Chocolate Box cafe for 54 years.

Those with slightly shorter memories may remember the 2001 auction when the Adler family, who founded The Chocolate Box enterprise, reaped $7.2 million from the sale against price expectations of $6 million.

CBRE's Mark Wizel, Justin Dowers and Rorey James with Fitzroys' David Bourke and Michael Ryan represented the private investor that has just bought the property. They said nine offers were received following an expression of interest campaign that closed in mid-November.

The large site has redevelopment potential but the last lease expires in 2024.

Private sale at Box Hill

Sixteen investors in a syndicate managed by Vantage Property Investments have sold a Box Hill office for $9 million - $2.2 million above its valuation price at June 30 this year.

Vantage spokesman Hamish de Crespigny said the owners acquired the 1817-square-metre office at 899 Whitehorse Road in 1988, refurbishing it on several occasions since. With a basement car park, the asset is leased to 14 tenants.

"We were approached privately by a local investment group wanting to purchase the building and after protracted negotiations we agreed a price," Mr de Crespigny said.

The asset sold on a low yield of 6.7 per cent.

"This is a return that hasn't been seen in the $5 million-plus Melbourne suburban office investment market since about 2007," said Mr de Crespigny. He said investors from the syndicate were now seeking a CBD or city-fringe office to reinvest their capital.

High yield in south-east

A commercial asset in Melbourne's south-east suburbs sold this week for almost $8 million. The investment at 363-365 Ferntree Gully Road, Mount Waverley, includes a 1323-square-metre office leased to Westpac Business Bank and a 1320-square-metre building occupied by 7-Eleven (this group's national headquarters is next-door at 357 Ferntree Gully Road).

Jones Lang LaSalle's Josh Tebb said the sale price reflected a yield of 7.9 per cent. He said Westpac was committed to the building for 10 more years. The convenience retailer will occupy its building for at least five more years. The asset, developed in the 1990s, sold from one private investor to another.

At the prime corner of Ferntree Gully and Gilby roads nearby, Sydney property company Dexus plans a major suburban office building.

Campbellfield lease

Waste removal and recycling company Speedie Waste has signed a 10,000-square-metre lease in Campbellfield.

Speedie Waste will pay a starting rent of $160,000 a year to occupy the facility at 1503-1507 Hume Highway near another large factory it will continue to occupy. Its latest Campbellfield site includes 1900 square metres of offices.

According to DTZ leasing agent Rob Mirabello, the property leased for an annual rent of $85 a square metre. He said three companies tendered for the factory, until recently occupied by Nacap Australia, which moved its Campbellfield functions closer to its Queensland head office.

Campbellfield is about 16 kilometres north of Melbourne near a busy junction where the Western and Metropolitan Ring Road meets the Hume Highway.

Record for Richmond

A member of the consortium that recently paid Amcor $120 million for its Alphington site has bought an inner-city block in Richmond.

Len Warson, chief executive of the Glenvill Group, has paid $3.5 million for a 559-square-metre block at 480-482 Church Street, just south of the Swan Street intersection.

Teska Carson selling agents Larry Takis and Adrian Boutsakis say the sale price reflects a record price for Richmond land of $6260 a square metre.

The asset was offered with a permit for a four-level, 1613-square-metre showroom. Amended plans awaiting permission may see an extra level added to this proposal.

In July Amcor confirmed that, after years on the market, it sold its Alphington paper mill to local consortium Alpha Partners, directed by former Macquarie chief Guy Nelson, and Glenvill. A mixed-use village is planned for that riverside site.

Paramount leaves west

Paramount Pictures has closed the curtains at a high-exposure corner in West Melbourne.

The Los Angeles-based company has sold unit 4 of a low-rise complex at 113 Adderley Street which it owned and occupied.

The office warehouse is identified by an imposing concrete wall which stretches along Dudley Street to Festival Hall. The wall has the potential to be rented to an outdoor advertiser, providing a source of revenue for the building's new owner, finance and development group ResCom, which paid $1.7 million for it at auction this month.

ResCom is replacing its current headquarters in Park Street, South Melbourne, with a 15-level apartment tower. Its new 811-square-metre West Melbourne showroom also has longer-term redevelopment potential.

Knight Frank's Chris Chartres and Ben Hackworthy represented Paramount.

Twitter: @marcpallisco
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