Inner north compound bad news for bottlenecks

But it would appear in government planning meetings, bottlenecks like that around Elliott Avenue, Macarthur Road and the University of Melbourne have received less consideration than other crisis-ridden road systems like the ones in suburbs between Seaford and Mount Martha where the $759 million (and many say unnecessary) Peninsula Link was recently given the green light.

Instead, the state government has appointed builder Australand to develop a major apartment compound on one of the inner-city's last remaining vacant development sites, opposite the Melbourne General Cemetery, the University of Melbourne and the busy roundabout that connects these two sites to Swanston Street.

With joint venture partners St Hilliers and Citta Properties which was involved in the controversial St Kilda Triangle redevelopment Australand will build its new project, Lume, around the historic Queen Elizabeth Centre buildings, at the suburb border of Carlton, Carlton North and Parkville.

Lume will include three towers ranging in height from four to six levels around the block bound by Cemetery Road East, Cardigan, Keppel and Swanston streets.

Upon completion Lume will include 148 flats, more than a third of which will be allocated as public housing. Lume will also include 111 car parks.

The new development comes 18 months after Housing Minister Richard Wynne granted the same consortium permission to replace low-rise commission flats in Carlton, with Viva a $260 million public housing-based project that, like Lume, private investors could buy into.

Australand is also building a $160 million, 18-hectare public housing-based village for the government in Westmeadows, near Melbourne Airport.

Another ambitious commission flat-based project spreads over two suburbs in the south-east: Ashwood and Chadstone, and includes 280 dwellings in six towers.

About 75 per cent of units in that $140 million Ashwood Chadstone Gateway project will be allocated as public housing.

Salta sells factory

LOCAL builder and fund manager Salta Properties is selling another asset, this time in Melbourne's west.

The 1.3 hectare industrial site with a 6800 square metre office in 25-29 Westgate Drive, Altona North, is fully leased to Toyota Australia, which uses the property to prepare motor cars for its national staff.

Beller Commercial director Fred Nucara is expecting about $5 million for the asset. Based on the asset's annual rental return of $510,000, that would equate to a yield of about 10 per cent.

Sunnyland buys site

CHINA-based builder Sunnyland Investment Group has paid about $40 million for a major St Kilda Road development site that has the potential to yield at least two major apartment skyscrapers, and a ground floor shopping centre.

The purchase continues a trend of Asia-based investors swooping on inner-city sites and exploiting the state government's problematic Melbourne @ 5 Million planning policy, which encourages higher density redevelopment around existing roads and public transport a strategy that hasn't gone unnoticed by stressed drivers, bus and rail commuters in this election campaign.

Sunnyland's latest acquisition is of the Clemenger BBDO House office at 472-474 St Kilda Road, on the south-west corner of Leopold Street.

The site includes a cheap-to-demolish low-rise, 4564-square-metre building with a massive 574-bay car park. The last tenant vacates the office in 2015, unless a relocation arrangement can be struck earlier.

Sources speculate the Clemenger BBDO site could make way for two major towers with a combined end value of around $400 million, depending on how dense the proposed project is.

Clemenger BBDO House was offloaded by Industry Superannuation Property Trust, which paid syndicate Domaine $29.6 million for the asset in October 2006. The syndicate, which was majority controlled by Mirvac, paid $20.3 million for Clemenger BBDO House in 2001 meaning the asset has doubled in value in just nine years.

A representative from Sunnyland's new national headquarters in Bourke Street was unavailable for comment when contacted by Capital Gain. Jones Lang LaSalle selling agents Robert Anderson and James Kaufman declined to comment.

Based on a development formula it has adapted in China, Sunnyland has quietly been building a portfolio of assets it can develop later in the CBD, Docklands and Melbourne's eastern suburbs.

Offshore interests, particularly from Asia, have become more confident to invest in Victorian residential projects in part because of controversial laws imposed by the Rudd-Gillard government removing an imposed cap of 50 per cent on the maximum number of apartments a foreign-based investor could buy within new complexes.

Some other major sites sold to Asia-based developers recently include the former St Kilda Post Office, the former Lonsdale Street Power Station, and sites on Mackenzie and Franklin streets at the top of town.

Out with the old

IT IS out with the old and in with the new at an increasing number of council planning meetings with another site once earmarked to become a retirement village winding up in the hands of residential developers, which have had reconfigured projects approved.

This time, near the Phillip Island retail township of Cowes, AMP Capital Investors has sold out of a $40 million aged care village it earmarked for 26 hectares of former farmland on Ventnor Road.

The new owner, a residential developer, is now proposing a standard "house-and-land package" based redevelopment called Whyte Sands.

It's believed AMP sold the site for about $8 million but this could not be confirmed with selling agency Oliver Hume.

AMP was one of several developers to abandon and sell proposed retirement communities on Phillip Island after the town's Warley Hospital closed in early 2008, rendering the nearest sickbay 45 minutes away. Sydney-based developer FKP holds a nearby residential village in its Victorian portfolio, and is developing that site, Shearwater, in stages.

In Melbourne, recently, industry super fund CBus Property announced it would build a $100 million residential village on a Brighton site once earmarked for a retirement community that it bought for $18.6 million.

In Hampton, the former Rehabilitation Hospital on Beach Road was also to have become an aged care facility in early planning, but was instead developed into a ritzy apartment complex during the economic downturn.

Redflex office sold

A LUXURY South Melbourne office building fully leased to Redflex, the controversial company that failed to maintain reliable Victorian speed cameras, has hit the market and is expected to sell for about $9 million.

Redflex pays close to $770,000 a year to occupy the three-level, 2596-square-metre building at 17 Market Street, opposite the prominent Gotham City, Australia's only six-star brothel.

The Redflex office is being sold by agency Knight Frank for owner Century Funds Management, which is affiliated with the Melbourne-based Over Fifty Group.

Redflex made headlines recently when it was revealed the company wrongly issued infringements to some 68,000 motorists on the Hume Highway from 2007.

But instead of refunding penalties incorrectly paid by motorists, Premier John Brumby said the government would retain compensation that is expected to be paid for the camera error from Redflex, an ASX-listed company.

Premier Brumby also recently confirmed he was considering signing Redflex to another major government contract, reportedly worth six figures.

Diva's retirement home

THE extravagant estate where legendary racehorse Makybe Diva is enjoying her retirement, is on the market.

The estate is held by one of the country's most noted thoroughbred owners. Details of the $8 million listing are in tomorrow's Sunday Domain.