Prestige market boosted by high-end apartment sales
Three other luxury units sold for between $7 and $10 million, several more went for between $4 and $6 million, with a total of 35 apartments selling above $2 million.
Almost half of the 270 apartments at 35 Spring Street on the corner of Flinders Lane opposite Treasury Gardens had pre-sold, enough for Cbus Property to commit to building the project, said Adrian Pozzo, the chief executive of the construction arm of the building industry's superannuation fund.
The million-dollar activity suggests the top-end property slump that has afflicted Melbourne's prestige market for the past three years has shifted.
Fairfax Media reported in May last year that owners of penthouse flats were having to slash prices by up to 25 per cent as the property downturn took hold.
Colliers International selling agent Brett Griffith said most of the apartments in the 35 Spring Street project had been taken by local buyers. The Bates Smart-designed building (artist's impression above) had "picked up a lot of upgraders", particularly baby boomers wanting to downsize or move to a unique CBD location.
The 43-level tower, which won't be finished for another four years, has taken advantage of this year's upturn in residential property, which has seen home auctions surge and prices stabilise despite concerns about oversupply in Melbourne's apartment market.
About 25,500 units are in the pipeline in the metro area this year and next, roughly four times what was built in 2005 when the apartment market last peaked.
"People talk about an oversupply of residential in Melbourne. There may be, but not for this project," Mr Pozzo said.
The tower will step back in three stages from nearby buildings and its metallic white finish will contrast with the beige government offices nearby.
Most CBD apartment developments with smaller single or two-bedroom apartments are structured to appeal to investors. The city's prestige buildings, such as the Melburnian and Yve, - are mostly on or near St Kilda Road.
Another city development, Mirvac's 39-storey Array tower at Yarra's Edge, is yet to sell its twin-level east and west penthouses priced around $8 million.
Dingle Partners agent Anton Wongtrakun said the top-end had "consolidated" this year.
Mr Wongtrakun sold a unit in the Westin, bordering the city square, for $6.5 million earlier this year. Another penthouse at 99 Spring Street, formerly owned by the Holmes a Court family, recently went for $4 million, he said.
Cbus was due to begin construction of 35 Spring early next year with demolition of the existing 12-storey office building and work on the tower's six-level underground car park expected to take a year to complete. Tenders closed for construction this week with Probuild, Equiset, Brookfield Multiplex, Lend Lease and Built on the shortlist.
Cbus was concentrating on residential projects because conditions in the commercial sector were a "bit tough", Mr Pozzo said.
sjohanson@fairfaxmedia.com.au
Frequently Asked Questions about this Article…
A suite of high-end apartments at 35 Spring Street sold quietly off-market over three months. A top-floor off‑the‑plan penthouse fetched close to $13 million, three other units sold for $7–$10 million, several sold for $4–$6 million, and 35 apartments in the project sold for above $2 million.
Cbus Property is the developer. Adrian Pozzo, chief executive of Cbus's construction arm, said almost half of the 270 apartments had pre‑sold, providing enough sales momentum for Cbus to commit to building the 43‑level Bates Smart‑designed tower.
The article suggests the top‑end slump has shifted: recent million‑dollar sales at projects like 35 Spring Street indicate a pickup in the prestige market after a few years of weakness. Industry agents also described the top end as having 'consolidated' this year, though this is presented as a market shift rather than a guarantee of sustained recovery.
According to Colliers International selling agent Brett Griffith, most apartments in the project were taken by local buyers and have 'picked up a lot of upgraders,' particularly baby boomers downsizing or seeking a unique CBD location—indicating a strong owner‑occupier presence rather than investor buying.
The article notes about 25,500 units are in the metro pipeline this year and next—roughly four times 2005 levels—so oversupply concerns exist. However, Cbus's Adrian Pozzo said oversupply 'may be, but not for this project,' highlighting that location, product mix and buyer profile can insulate certain prestige developments.
Cbus was due to begin construction early next year, starting with demolition of an existing 12‑storey office building and about a year of work on a six‑level underground car park. Tenders closed with Probuild, Equiset, Brookfield Multiplex, Lend Lease and Built on the shortlist.
The article contrasts 35 Spring Street with other prestige towers: many CBD developments with smaller one‑ or two‑bed apartments are pitched to investors, while prestige buildings like the Melburnian and Yve sit near St Kilda Road. Mirvac’s Array at Yarra’s Edge still had twin‑level penthouses around $8 million unsold at the time of reporting.
The activity signals an upturn in residential property this year—auctions surged and prices stabilised—particularly at the top end where local upgraders are buying. Everyday investors should note that many CBD developments aimed at investors are smaller apartments, while prestige projects are attracting owner‑occupiers, which can affect rental demand and yield profiles.
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