Capital Gain: Roundabout site fetches $22 million from developer

Marc Pallisco    

August 21 2015

A local developer is understood to be in due diligence to pay more than $22 million for a high-profile site which forms the western edge of the Haymarket roundabout in North Melbourne.

The adjoining blocks known as 1 Flemington Road and 245-249 Peel Street, together with 3-5 Bedford Place are opposite the University of Melbourne's Parkville campus and the new Victorian Comprehensive Cancer Centre.

Covering more than 1200 square metres, the properties are adjacent to a collection of low-rise sites on Elizabeth Street, including the prominent City Toyota dealership, which are in the early stages of being repurposed by their respective owners for high-rise, apartment buildings.

On the opposite (eastern) side of the Haymarket roundabout, which is classified as Carlton, the University of Melbourne will replace the Elizabeth Street site occupied by City Ford to a college use down the track.

The 1 Flemington Road property has been owned by several high-profile entrepreneurs including Dean Giannarelli and later, Mario Salvo, who offloaded it six years ago.

Between the Royal Melbourne Hospital and Queen Victoria Market, the area has been the subject of a new Precinct Structure Plan, allowing for sites to be replaced with higher density structures.

Vinci Carbone's Frank Vinci declined to comment about the campaign he managed.

The deal comes 10 months after Sydney Roosters chief Nick Politis sold the City Lexus dealership, in nearby Elizabeth Street, for $15.5 million.

Investor Pays $8.3m For Over-55s Asset

Aged care service providers were outmuscled by investors chasing yield – resulting in the $8.3 million sale of Carrum Down's Protea Village this week.

The asset, which includes 61 low-rise homes, each with a courtyard, occupies a 6279 square metre block a few hundred metres from the Carrum Downs Shopping Centre. Centrelink pays the rent for the village occupants.

Since Protea Village was developed in 2003, the bayside suburb, about 35 kilometres south of the CBD, has seen a building boom of apartments, townhouses and retail amenity. Carrum Downs is a short drive to major activity centres at Cranbourne, Dandenong and Frankston.

John H Castran agents John Castran and Lachlan Castran marketed the flexible property for a private investor.

The townhomes are on subdivided plots, meaning the new owner could sell the dwellings individually, perhaps after collapsing an agreement that now the site to residents who are over-55.

More likely, however, given the high yield achieved (9.3 per cent) – the new owner will retain 22 Protea Street in its current use.

Education Service Providers Sell

Two education service providers have listed prime holdings this week.

In the CBD, the Melbourne-based owners of the Carrick Institute of Education are selling a city college, at 54-56 La Trobe Street. The 510-square-metre block is being touted by selling agency Fitzroys for its skyscraper redevelopment potential, but is not being offered with a permit.

In the past 18 months, smaller blocks in the CBD have been the subject of skyscraper proposals upwards of 50 levels.

In inner-north Carlton, meanwhile, the Melbourne Language Centre has listed a double-storey terrace within the popular Lygon Street restaurant strip. The 514-square-metre block, with little redevelopment potential given local planning sensitivity, is for sale via Colliers International and expected to achieve more than $7 million.

Two months ago, the Menzies Institute of Technology bought the old Carron Tavern site at 396-400 Spencer Street in West Melbourne.

NGV to St Kilda Triangle?

Speculation is mounting the National Gallery of Victoria will open a third gallery on the St Kilda Triangle site.

The NGV is investigating a location for its next gallery – a move coinciding with the Port Phillip Council launching a new consultation for the precinct, which also includes the historic Palais Theatre.

Locals successfully opposed a bid by developers years ago to replace the St Kilda waterfront property with a mixed-use village with shops and restaurants.

Bourke Street Listing

The Bourke Street shop for years occupied by exclusive jeweller William Drummond has hit the market as an investment.

Now leased to OPSM, the double-storey building, on a 514-square-metre block at 384-386 Bourke Street, is expected to sell for more than $15 million, Savills Clinton Baxter says.

William Drummond & Co, which was established at another city location in 1858, owner-occupied the Bourke Street building from 1965 until 2002, when the business shut.

In 1954, Queen Elizabeth II thanked William Drummond & Co for a diamond and ruby brooch, created for an Australian tour.

Famous faces known to frequent the high-end store included Paul Keating, Bob Hawke, Dame Nellie Melba and Tamie Fraser.

Deja vu as Dumbrell Buys Another Suburban Office

There was a sense of déjà vu at the recent auction of a Malvern East office building, when retired Autobahn founder Garry Dumbrell was bidding to agents for Colliers International and GormanKelly.

Just two years ago, Dumbrell was tendering to the same four negotiators who were auctioning another eastern suburb office, on Cotham Road, Kew.

As opposed to Kew, where Dumbrell won the property at the event for $10.3 million – the car king had to bargain post-auction for the Malvern East investment at 1911 Malvern Road, which he snared for $9.85 million.

On a corner site of 1604 square metres, and with 87 car parks, the triple-storey office has a lettable area of 2315 square metres and is fully leased, returning $717,091 per annum. On that basis, the asset traded on a yield of 7.3 per cent.

"The campaign was extremely well received with in excess of 150 inquiries from a mix of local private, offshore and syndicate buyers," Colliers director Peter Bremner said. "The underlying land is ripe for future redevelopment."

However, Dumbrell is expected to generate an income from the office, after a refurbishment.

Dumbrell made headlines in 2009 paying Clinton Casey a then state record residential price of $21 million for the landmark Avon Court mansion in Hawthorn. However, following a serious cancer diagnoses (from which he has fully recovered), Dumbrell sold the trophy property.

Last year, he listed for sale some Little Collins Street shops that had just been refurbished.

Two months ago, Dumbrell paid Rino Grollo $1.7 million for the Howqua penthouse of the Mount Buller Chalet.

Mr Bremner and colleague Ben Baines sold 1911 Malvern Road with GormanKelly's Robert Kelly. Sandro Peluso, who recently resigned from GormanKelly, was also listed as a marketing agent.


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