This article is from the Australian Property Journal archive
MELBOURNE continues to attract Chinese developers, a Shanghai-based buyer has snapped up a residential development site at South Yarra with a permit for 236 apartments for $18 million.
CBRE’s Mark Wizel and Justin Clarkson negotiated the sale of the 2,393 sqm site located at 3-9 Claremont St South Yarra. The sale price represents a rate of $7,521 per sqm of land and $76,271 per unit site based on the approved permit.
Wizel said this is the strongest price paid for a development site in South Yarra or Prahran of this scale over the past two years.
“We received several expressions of interest and short listed three parties all of whom were associated with interests from mainland China.
“This is further evidence of the underlying confidence that Chinese groups have in the Melbourne residential development sector as well as the underlying interest they have in divesting funds to Australia,” he added.
“In the case of Claremont St, the added attractions were the approved planning permit and the strong end market for apartments in South Yarra. The property is the latest in a series of major inner Melbourne residential sites to be acquired by Chinese developers over the past two years,” he continued.
Other examples include the former Stonington Mansion site in Malvern, 4-10 Daly St in South Yarra and the former Communications House Building on William St in the Melbourne CBD.
Wizel said mainland Chinese groups have spent in excess of $170,000,000 on acquiring major inner city sites over the past two years with an additional $130,000,000 in sites being sold to development companies with direct interests in Singapore and Malaysia.
“Many of these offshore groups are willing to put in more equity than local groups to develop sites which has been a pre-requisite to obtain bank funding since the GFC. They are also very comfortable financing their projects overseas given that fewer restrictions are placed on selling apartments to buyers across the Asian mainland,” he said.
According to Wizel, developers from mainland China were generally more comfortable acquiring suburban – rather than CBD – sites in locations such as South Yarra, Prahran, Brighton, Balwyn and Doncaster.
In contrast, Malaysian and Singaporean developers on the other hand tended to be focused on more ‘core’ locations such as the Melbourne CBD and St Kilda Rd.
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