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South Yarra developer snaffles Maidstone lot

SOUTH Yarra-based developer R.Corporation has acquired another prime residential development site that its rivals might have avoided.

SOUTH Yarra-based developer R.Corporation has acquired another prime residential development site that its rivals might have avoided.

The builder has paid Australia Post $11.5 million for a two-hectare property at 29 Hampstead Road, Maidstone, until recently used as a sorting and distribution centre.

R.Corporation is expected to build a $100 million village at the site.

A development of this value would be the biggest residential project undertaken in the small suburb, which shares the same postcode as West Footscray, and is about eight kilometres from the CBD, near the Highpoint Shopping Centre.

Since the 1990s, several big government-controlled sites in Maidstone, including the Phillip migrant hostel and Department of Defence land, have made way for housing estates. The Medway Golf Club is the suburb's most prized potential development site. It is on a hillside abutting the Maribyrnong River.

For R.Corporation, the purchase continues a trend of buying in Melbourne's suburbs. Last June it paid $20 million for a four-hectare block in Cheltenham.

R.Corporation has developed townhouses in Buncle Street, North Melbourne, opposite a commission flat tower. Its Park Terraces project replaced a factory site once occupied by Esky maker Willow, and which R.Corporation bought for $7.06 million in mid-2007.

Colliers International marketed the Maidstone site for Australia Post, but selling agents Shane Dargue and Nathan Bingham refused to comment. An R.Corporation representative was unavailable.

Six weeks ago, Australia Post withdrew from sale a prime 1.2-hectare development site at the CBD/Docklands border on Spencer Street, which was expected to fetch between $40 million and $45 million.

RACV pockets $2m

THE Royal Automobile Club of Victoria is about $2 million richer after selling a 9711-square-metre development site in Frankston South. The mostly undeveloped block at 6 Robinsons Road sold to an investor and is expected to make way for a residential redevelopment in the medium to long term.

The asset derives annual rent of $110,000 from leases to five telecommunication companies. It is next door to the Village Baxter retirement village and a caravan park and is close to what will be an on-ramp to the $759 million Peninsula Link freeway.

Knight Frank's Leigh Morris and Michael Hede represented RACV.

Office fetches $11m

MALAYSIA-BASED developers have paid $11 million for a vacant double-storey office on a big block in Carlton.

The 2100-square-metre office at 607 Swanston Street is on a 1185 sq m site and was until recently fully occupied by call centre Salesforce.

As is, the office has the potential to return annual rent of about $400,000, according to Anthony Kelly, director of selling agency Kelly and Kelly. But it is expected the office will be torn down and replaced with at least one apartment tower.

Mr Kelly says surrounding properties are now receiving approval for developments of up to 13 levels. Not far away from 607 Swanston Street, Grocon has proposed two skyscrapers including Portrait, which will rise 31 levels, and the DCM building, which, if it ever takes off, could be Carlton's tallest building at 90 levels.

The vendor of 607 Swanston Street, an investor, built the office in the late 1980s.

The sale continues a recent trend of Asia-based apartment developers purchasing prime inner-city sites.

Because of relaxed foreign ownership laws introduced by the Rudd-Gillard government about three years ago, international investors are now allowed to buy 100 per cent of units in new apartment complexes, as opposed to 50 per cent, under the Howard government. An example of this policy in action is on part of the former City Mazda site, at 206 A'Beckett Street, where a 25-level, 280-unit skyscraper is nearing completion.

Apartments in this tower have not been marketed to Australian buyers.

Malaysia-based developers paid local developer Drapac $5.3 million in late 2008 for the 1194 sq m block near the Queen Victoria Market, where 206 A'Beckett Street is being developed.

Heritage Estate sold

PROMINENT Chinese businessman Sunny Sun has paid a price speculated to be about $15 million for the 176-hectare Heritage Estate.

The property includes the Heritage Golf and Country Club, which includes two 36-hole golf courses, one designed by Jack Nicklaus. Mr Sun's new asset, in Chirnside Park, also includes club facilities, a spa complex and land holdings. The estate's Sebel Hotel will continue to be managed by Mirvac Holdings. Mr Sun is the managing director of Australian Chinese News, Chinese Property Weekly, and Asian Weekend. He is also vice-president of the Federation of Chinese Associations, which represents Victoria's Chinese community, and is responsible for the Melbourne Chinese New Year Festival celebrations as an exporter of Victorian wine.

His company, Golden Heritage Golf Pty Ltd, was advised by Falcon Corporate Advisory and Lander and Rogers Lawyers. Knight Frank's Michael Hede was the marketing agent.

Driving a bargain

RECEIVER KordaMentha has recovered about $8 million from the sale of a multi-level car park near Melbourne Airport. The four-level commercial complex at 5 South Centre Road, near the junction of Keilor Park Drive and Sharps Road, sits on a 5217 sq m block and includes about 650 car spaces within 20,000 sq m of enclosed area. Based on the price, each parking bay sold for about $12,300.

Compare this with central-city rates, where an 861-bay complex in Flinders Street sold in 2007 to billionaire businessman Lloyd Williams and his son, Nick, for $60 million, reflecting almost $70,000 a bay.

The Tullamarine asset, built about 2006, was offered for sale or lease in February. Colliers International's Jeremy Gruzewski and Matthew Stagg, with CB Richard Ellis's Scott Orchard and Dean Hunt were the marketing agents.

Perth company exits

PERTH-BASED developer Peet & Co has apparently decided against developing a 28-hectare housing estate in Melbourne's outer south-east, and is now selling the site.

Sources expect the block could fetch close to $30 million, given it is for sale with a 291-lot subdivision and effectively ready to build on.

On Abrehart Road, about 55 kilometres south-east of the city, the estate is near commercial hubs in Cranbourne and Dandenong and is not far from the Pakenham Golf Course.

Over recent years and particularly since the former state government started regularly revising Melbourne's urban growth boundary farmers and other landowners in the 30-kilometre belt from Dandenong to Pakenham have been offloading sites to developers.

In March, the Pakenham racecourse site sold to local developer The Corcoris Group for $38 million, and will also become a housing estate.

The timing of the Pakenham listing comes at a particularly bleak point in the housing sector, with many house-and-land package-based estates reporting significantly slower sales, despite low interest rates. Moving forward, the outer suburban housing sector may also be affected by stagnant or negative capital gains.

But the downturn will do little for housing affordability, with the Housing Industry Association recently confirming that average mortgage costs for new homes will rise about $43 a month because of the newly announced carbon tax adding almost $13,000 to construction costs.

Car yard going

ANOTHER suburban car yard is making way for an apartment tower, this time at Kew Junction. Read Sunday Domain tomorrow for details.

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