High density Carlton development site sold for $5.5 million

A single level Carlton warehouse building in a high-density development zone has sold for the first time in 30 years. It fetched $5.5 million with bidders keen for the zoning that allows development heights up to 40 metres. A short term lease in place provides initial income from the 135-139 Leicester Street warehouse that spans the 270sqm lot. It is set among several student accomodation buildings including 127 Leicester St where the 100-plus studio spaces come with prices ranging between $150,000 and $185,000. There are also permit approved sites with one directly opposite that will be 14 levels of accommodation for hotel, residential and student accommodation. Scape, the country’s largest student accommodation provider, recently acquired Oxfam’s head office, for a speculated $15 million. The four storey warehouse office at 130-138 Leicester Street will be replaced by a 334 room tower with a $43 million construction estimate. The 986 sqm site last traded at $4.08 million in 2005. CBRE’s Nathan Mufale, Scott Hawthorne, David Minty and JJ Heng negotiated the $5.5 million deal to secure a strong land rate of more than $20,0000 per sqm. Mr Mufale noted that the depth of bidding highlighted the strong demand for opportunities. The bidders included student accommodation groups taking a long-term view on precincts such as Carlton. “The lack of students travelling into Victoria caused headwinds however, the student accommodation groups we are dealing with are looking to fuel their respective development pipelines well beyond the next 18-24 months” “Pricing has firmed for landholding in certain city fringe pockets of Melbourne where international buyers see long-term value," Mr Heng said. "The groups who bid on this property were all focused on building their portfolios with high quality assets that provide development upside down the track.”