The Melbourne-based Carter Group has put a five-level St Kilda Road office building with residential development potential on the market with hopes of $20 million.
The building at 450 St Kilda Road is between Toorak and Commercial roads, an area that in the past has attracted interest from residential developers.
Most of the squat concrete and glass structure was tenanted until 2016, said Colliers International's Nick Rathgeber, who is marketing the building with colleagues Tess Elliott and Brett Griffith.
"It's anticipated someone will knock it over in the near future and do a residential building," he said. The 2323-square-metre site fronts St Kilda Road and Queens Lane.
Mr Rathgeber said residential development sites in St Kilda Road were rare. "Active developers want to be as close to the city and botanic gardens as possible," he said. "The property offers the luxury of a valuable holding income throughout the design and approval process, with vacant possession achievable by 2016."
The low-profile Carter Group brought 450 St Kilda Road in 2002 for $8.2 million, title records show. The group also owns 448 St Kilda Road next door and is in partnership to develop the soon-to-be-completed Albert Tower in South Melbourne.
Several years ago, the group was behind a deal to sell a prime beachfront development site in Queensland, the Seahaven Resort in Noosa, to British-based investment group Blue Sky Capital for $120 million. The sale negotiated in 2008 fell through after the global financial crisis struck.
Lemon Baxter director Paul O'Sullivan said recent sales in St Kilda Road had primarily been investment-grade stock. In April, 71 Queens Road with a net lettable area of 8444 sq m went for $25,575,000. Another at 10 Queens Road with an NLA of 9005 sq m sold in the same month for $21,350,000.
Expressions of interest for 450 St Kilda Road close on July 25, Mr Rathgeber said.
St Kilda Road area sales in 2013
71 Queens Road
Net lettable area
8444 sq m
10 Queens Road
Net lettable area 9005 sq m
541 St Kilda Road
Net lettable area 8229 sq m
615 St Kilda Road
Net lettable area 8532 sq m
SOURCE: COLLIERS AUSTRALIA