This article is from the Australian Property Journal archive
MELBOURNE apartment developer Central Equity has seeing off six players vying for two prized properties owned by Crown casino.
The properties were snapped up for $13.5 million in a hotly contested sales campaign conducted by CB Richard Ellis’ Mark Wizel and Sebastian Drapac.
Wizel said the campaign had attracted 12 Expressions of Interest, with six parties short-listed to contest the sale.
“The buyer demand exceeded expectations.
“Coupled with the price that was achieved the deal reflects the positive developer and bank sentiment toward good quality inner city development sites. There was aggressive bidding from several “equity rich” developers that have positioned themselves well by selling down assets at the peak of the cycle and who now see opportunities to secure good stock to rebuild their pipeline for the next three years,” he added.
Situated at 141-145 City Rd and 147-155 City Rd, the neighbouring sites have a combined landholding of 2,527 sqm.
Wizel said the parcel have the potential to accommodate a significant high rise development, subject to the relevant planning approvals.
The purchase fits with Central Equity’s strategy. Over two decade, the company has dominated the Southbank apartment market and recently completed construction of SouthbanOne – a 37-level residential and commercial tower within close proximity of the Crown site.
Wizel said the Crown deal demonstrated the strong appetite for residential development sites located in and around the Melbourne CBD.
“The inner city residential development sector is one area that is still attracting interest from financiers,” Wizel said.
Drapac said the Crown campaign attracted buyer interest from Melbourne, Brisbane, Sydney and Adelaide, with the eventual sale price being close to 20% above initial expectations.
“Taking into consideration that there was no holding income or planning permit in place, the result indicates the strong confidence investors and developers have in the Melbourne market,” Drapac said.
141-145 City Rd comprises a high quality two-storey, 1,649 sqm building, with ground floor showroom space and 10 on site car spaces. The total land area is circa 925 sqm.
The larger 147-155 City Rd site has a total land area of approximately 1,602 sqm. The property features a two-level building known as Millbank House, which was refurbished and extended in 1989. The building has a total lettable area of circa 1,602 sqm, with 43 on-site car bays.
The properties had been home to Crown College, an extensive training facility, for 15 years. Crown is completing construction of a new $10 million training facility which will be contained within the new Crown Metropol Hotel.
Settlement of the deal is scheduled for May 2010 when Crown will relocate to new training facilities.
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