Neighbouring city sites expected to fetch $20m

Two more development sites are being offered for sale just a week after a Melbourne private investor sold a portfolio of three properties for more than $80 million.

Two more development sites are being offered for sale just a week after a Melbourne private investor sold a portfolio of three properties for more than $80 million.

The two low-rise buildings, on neighbouring sites on the corner of King and Batman streets in the city's north, were expected to fetch more than $20 million.

They are in a city block that overlooks the Flagstaff Gardens and which contains medium to high-rise developments.

Melbourne's residential development sector has been dominated by overseas developers filling a gap in the market after local banks tightened finance restrictions in the wake of the global financial crisis.

One of the buildings, 15 Batman Street, is occupied by a scientific equipment manufacturing business, Glass Expansion, run by the property's joint owners Jost Kaiser and Danny Brezni.

Jones Lang LaSalle's Matthieu Lucas and Steven Messina said the two buildings were in a mixed-use zone and covered a combined area of about 3293 square metres. They were for sale either together or separately, Mr Lucas said.

Neither agent would comment on the expected price but a similar sized asset owned by the Cancer Council, opposite the Carlton Gardens, in Rathdowne Street was sold for $19 million in April, a rate equivalent to $6200 per sq m.

The larger site in Batman Street had the potential for two 13-level towers, Mr Lucas said.

The northern and western end of Melbourne's CBD has undergone significant change in the past decade as rising demand encourages conversion of office or industrial buildings into apartments.

One of Asia's largest developers Far East Consortium recently appointed Brookfield Multiplex to build stage three of its 282-unit Upper West Side apartments, on the corner of Spencer and Lonsdale streets. In June it bought another Spencer Street site, the former home of The Age, from Industry Superannuation Property Trust for $76 million.

Other developers have been active further west. Urban Inc expects to complete its Alessi apartments, in Spencer Street, this year and begin building two others, one in Roden the other in Dudley Street, next year.

A large 2788-square-metre block in Clarke Street, South Melbourne has also been put on the market.

Just south of Crown Casino, it has a two-level office. It was expected to fetch about $10 million, Lemon Baxter director Paul O'Sullivan said.

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