Dexus opts out of Flinders Street and opens the door to a new urban realm

The year's first large-scale permitted site to be offered for sale will see Dexus Property Group exit as the long-term holder of 32 Flinders Street.

Dexus has over recent years headed a planning push to have the site find a different purpose, eventually gaining approval for two residential buildings onsite that could yield hundreds of new apartments overlooking Birrarung Marr and surrounds. The prospective buyer will not only have the right to develop the property, but could also maintain the existing commercial asset. 

Agent CBRE City Sales have the task of moving on the property which currently holds 546 car spaces and generates a net income in excess of $2 million annually.

The site is listed as holding approval for 47 levels to Flinders Street and a more modest 14 levels building to Flinders Lane. This is down from the original version that has sought a 212 metre outcome including 625 dwellings. The height of the SJB Architects-designed tower has fallen to 175 metres AHD so as not to cast a shadow within 15 metres of the north bank of the Yarra.

The development did gain support form planning officers at 191 metres AHD, and Dexus subsequently lodged an appeal with VCAT over the eventual height. With that effort failing, Dexus's apartment yield for the development would have likely fallen in excess of 20 percent since the project's initial visit to planning.

Alongside the apartment towers, the scheme also involves an extensive ground floor reconfiguration, enhancing pedestrian network connections and at one stage had intended to gift the private portion of Spark Lane to Melbourne City Council.

Currently, the car park adds little to the Flinders Street urban realm. The prospect if it making way for a new and activated building along with the expansion of the adjoining Lindrum Hotel does raise the likelihood of the rejuvenation of the urban realm in this portion of the CBD.

Under the development application expectations, a rebirthed 32 Flinders Street would:

• Providing a new pedestrian connection from Flinders Lane to Sargood Lane
• Providing new retail activation & interfaces
• Consolidating vehicular access at Flinders Street, away from the laneways
• Allowing Spark Lane to be optimised by removing the existing 5 level car parking link bridge above
• Providing a new lobby address to Spark Lane by gifting MCC with private land
• Allowing for greater passive surveillance throughout the area