Developers beaten to Kew car-parking spot

Boroondara City Council has outmuscled developers for a prime piece of land in ritzy Kew.

Boroondara City Council has outmuscled developers for a prime piece of land in ritzy Kew.

The council has signed an agreement with Holy Trinity Anglican Church to lease a 1283-square-metre open-air car park at 16 Peel Street, near High Street and the Kew Junction.

Formalised into the lease is an option to buy the land in three years for an as yet undisclosed sum.

When 16 Peel Street hit the market earlier this year it was expected to sell for about $3 million to a developer who would build a high-density apartment complex on the site. Not far away, a former car dealership is being replaced with a 12-level building called Clara-Q.

A council spokeswoman said the council secured the asset to improve parking availability for shoppers, visitors, traders and employees around the busy junction, at times a congested retail strip.

"The provision of additional public parking spaces is in accordance with council's Kew Junction car-parking study," the spokeswoman said.

Gross Waddell's Andrew Greenway and Andrew Waddell marketed the Kew land.

In 2011, residents in Madden Grove, Kew, paid $9 million for a former University of Melbourne campus also expected to wind up in the hands of developers.

The VicRoads office headquarters in Denmark Street, also near the junction, has been identified as a site ripe for intense residential redevelopment in the medium term.

Former HP HQ fills up

All of a large suburban office, for years the Melbourne headquarters of IT company Hewlett-Packard, has been leased to a variety of smaller tenants.

The newest occupant of the 9500-square-metre complex at 41-47 Joseph Street in Blackburn North is Ambulance Victoria, which has leased about 2557 square metres, paying starting rent of about $170 per square metre a year.

It joins the Fire Protection Association Australia, which last year signed for 1318 square metres, and Arlec, which in 2011 committed to 2743 square metres.

The 2.1-hectare complex, near Middleborough Road and EastLink, includes a huge 364-bay car park.

GormanKelly's Grant Butler has managed the leasing campaign. Hewlett-Packard vacated the office for a purpose-built facility opposite the Tally Ho Business Park in Burwood East.

Offices sell

A near-new Richmond office building, part of the Botanicca Business Park near the Yarra River, has sold for $6 million, just days after a formal expression-of-interest campaign closed.

The three-level, 1615-square-metre asset on a 973-square-metre block at 582 Swan Street was purchased by a local private investor. The freestanding building is near large facilities occupied by GE Capital and the University of Melbourne.

Gross Waddell's Jonathan McCormack and Andrew Waddell marketed the asset with vendor advocacy Australian Professionals Property Services.

The mortgagee in possession, Pitcher Partners, was acting for property owner Warren Thompson.

The sale price translates to a high yield of 9.4 per cent.

Geelong dome rises

Construction of a building expected to become a Geelong landmark has started. The $45 million library and heritage centre, under construction on the footprint of the former library in Johnstone Park, was designed by Melbourne firm ARM Architecture, which in 2012 completed the $136 million redevelopment of Hamer Hall at the Arts Centre Melbourne.

The Geelong complex is a similarly dramatic structure - with a large dome covering the multi-storey community space. The complex is expected to open in 2015.

Council economic modelling estimates the new city library will increase visits by 400 per cent.

The council is contributing $20 million to construction, with the balance coming from state and federal government.

Bunnings site sale

The Bunnings Group is selling a $30 million national portfolio of nine development sites - three of which are in Victoria. Surrounding near-new Bunnings hardware stores, the "residual land parcels" are now surplus to the retailer's needs.

The most valuable asset is in Thomastown, 17 kilometres north of the city, where a 1.5-hectare block abutting a Bunnings car park is expected to sell for about $4.5 million.

The land has the potential to be replaced with a strip of smaller warehouse-retailers that would be able to cash in on demand from the hardware next door. The largest asset is a 3.4-hectare block in Craigieburn, about 26 kilometres north of town, expected to sell for $2 million.

Bunnings has also listed for sale land in the regional town of Hastings, with price expectations of $1.8 million.

The sell-down is being managed by Stonebridge Property Group. Butera and Company director David Butera is agent on the Thomastown site. Stonebridge has appointed Gross Waddell to sell the Craigieburn and Hastings blocks.

In July Bunnings announced the sale and leaseback of a portfolio of 10 assets to the BWP Trust in a deal reportedly worth $271 million.

Lower-density demand

Developer K7 Developments Pty Ltd has paid $2.75 million for a Surrey Hills site with a permit for a three-storey mixed-use complex.

The 1009-square-metre block at 629 Canterbury Road has for years been owner-occupied by MDG Advertising. The permit allows for 28 apartments, four townhouses and two commercial offices.

CBRE's Alex Zent, who marketed the asset with Paul Tzamalis, said difficulty funding higher-density projects is seeing demand rise for smaller-scale opportunities.

While surrounding suburbs Kew, Hawthorn, Camberwell and Balwyn, are experiencing a wave of apartment construction, less has been proposed around Surrey Hills, which is 12 kilometres from the CBD.

Mr Zent said just 40 units were under construction in the area, including 17 at 160 Union Road and 23 at nearby 619 Canterbury Road.

Fishermans Bend hook

It has been a busy month for mid-size skyscraper proposals in and around Melbourne.

At the city's newest urban village - the 240-hectare Fishermans Bend - plans have been lodged for a 26-level, 184-unit complex at 125-133 Thistlethwaite Street.

The applicant paid just over $4 million for the development site at auction on Anzac Day eve this year. The sale price reflected a land rate twice what it was valued at immediately before the Capital City 1 rezoning.

The application was lodged just before the state government unveiled a master plan late last month which imposes height limits for proposed buildings around this pocket of Montague.

That decision has disappointed many developers, who say they were instructed by the government to propose 30-level-plus projects.

Instead some areas will now be limited to less profitable projects of four levels.

Meanwhile, north of town, in Preston, developers have applied to build a major apartment tower, this time of 18 levels.

The proposal will replace a showroom at 6-34 High Street and is at present that suburb's tallest tower.

However, bigger skyscrapers are expected to replace factories within a 35-hectare industrial estate near Northland Shopping Centre in Preston East. The land is earmarked to be rezoned to allow for high-density residential use.

marcpallisco@gmail.com Twitter: @marcpallisco

Related Articles