Prime St Kilda road office building listed with $20 million hopes
Swanky residential apartments or perhaps a hotel could grace a prime St Kilda Road office building that goes to the market via a July 25 expressions of interest campaign.
The prime location at 450 St Kilda Road is in the Domain precinct about 200 metres from Toorak Road towards Commercial Road backing onto Queens Lane.
Agent Nick Rathgeber, of Colliers International, says he expects the 2323 square metre site to fetch around $20 million.
‘’Pricing is hard to predict and most buyers price more aggressively than vendors so it’s possible that this price point will be breached.’’
The Melbourne-based Carter group has put the five-level office building on the market after buying it for $8.2 million in 2002. The group reportedly owns No. 448 next door and is in partnership to develop the soon-to-be completed Albert Tower in South Melbourne.
Established in 1946, the second generation Carter family business has expanded over seven decades from a single electrician into a property development, investment and management firm with operations in several states. It owns and operates holiday accommodation in Queensland and has designed and developed residential property from Port Melbourne and throughout Melbourne’s eastern suburbs.
Mr Rathgeber says he expects the building to be demolished and completely rebuilt as prime residential apartments to take advantage of its prestige position near the Royal Botanic Gardens and parklands. Concept plans are for a high rise residential apartment tower over 18 storeys, however, a more ambitious scheme may be possible, subject to council approvals.
“Increasingly, Melbourne developers are successfully securing permits for highly ambitious residential towers that continue to push the envelope of conventional high density apartment living. This site provides another potential opportunity for someone to take it to the next level.”
Residential developments along this stretch of St Kilda Road are rare, he said, with active developers wanting to be as close to the city and botanic gardens as possible.
‘’This property offers the luxury of a valuable holding income throughout the design and approval process.’’
Mr Rathgeber said existing concept plans for residential development were available, but other uses could be a hotel, commercial redevelopment or owner occupation.
The building is tenanted until 2016 with vacant possession achievable by then. The current return is $708,822 per annum.
Co-selling agent Tess Elliot said: “Melbourne’s inner city population experienced exceptional growth of 6.3 per cent between the years of 2006 and 2011. By comparison, Greater Melbourne experienced growth of just 2.86%and Victoria as a whole only 2.65% in the same period, indicating an increasing level of acceptance around inner city apartment living.”
The trend is expected to continue, with the inner city Melbourne population set to experience strong growth of 3.73% until 2016 and 4.96% between 2016 and 2021, according to DPCD Victoria in Future 2012.
Colliers International expects a limited apartment supply for St Kilda Road in the next five years.
“There are currently no apartment completions forecast from 2016 onwards in this precinct, making 450 St Kilda Road an ideal proposition for developers wishing to capitalise on the limited supply situation,” Mr Rathgeber said.
The existing office building of 4360 square metres comes with 59 car parks.