This article is from the Australian Property Journal archive
LEFT abandoned since the coronavirus outbreak halted international travel, the Melbourne city fringe site of derelict hotel Bayview on the Park is set to join a growing list of major build-to-rent projects, after being picked up by a partnership between Aware Super and Altis Property Partners for about $70 million.
At nearly 7,000 sqm, the sale of 50-52 Queens Road site in the St Kilda Road precinct represents one of the city’s largest hotel and inner-city land deals for the year.
Bayview International Hotels & Resorts – part of Malaysian group Oriental Holdings – put the property to the market with vacant possession in March, one year after its major cash cow, the Grand Prix, was cancelled for the first time this pandemic. The idle hotel had been broken into and damaged, as documented on social media.
The older-style, five-level building features 203 guest rooms, a restaurant and bar, several meeting rooms, outdoor swimming pool and multideck carpark. That will all make way for a new 300-apartment build-to-rent project that will take Aware Super’s national pipeline to 1,400 units.
The property was sold via an expressions of interest process handled by JLL’s Josh Rutman and MingXuan Li alongside JLL Hotels & Hospitality Group’s Peter Harper and Nick MacFie.
“We have handled some very prominent land sales in recent years along St Kilda Road and Queens Road, but this is the third-largest wholly-owned landholding in the entire precinct and the market reacted accordingly,” Rutman said.
“Whilst it’s an exceptionally strong result for our vendor given that the property is without planning approvals, it’s also not surprising given the current level of activity amongst Melbourne’s developers as they look to build their book of work and take advantage of the severe drop in projected residential supply in the coming years,” Rutman said.
Harper said interest was received from an “incredibly wide range of groups including those looking to re-establish the hotel, convert it to an alternative use or pursue a complete redevelopment”.
“This sale of the Bayview on the Park continues a trend we are seeing across Australia where hotels in prime locations that are nearing the end of their asset lifecycle are worth more as alternative uses.”
The acquisition comes hot on the heels of Australia’s largest build-to-rent development gaining approval, a couple of suburbs away in South Melbourne. US giant Greystar teamed up with renowned architects Fender Katsalidis for a $500 million project that will have 625 units and 2,400 sqm of retail and commercial office space across two towers over the Yarra and Claremont Street sites.
Greystar had earlier in the year raised $1.3 billion for the Greystar Australia Multifamily Venture I from Ivanhoé Cambridge, APG Asset Management and Ilmarinen, establishing Australia’s largest build-to-rent venture to date.
Benjamin Martin Henry of Real Capital Analytics told Australian Property Journal’s Talking Property podcast series there are 45 build-to-rent projects in play across Australia, with a total pipeline of 15,000 to 20,000 units.
Throughout Melbourne, global real estate firm Hines has begun its foray into Australia’s build-to-rent market, buying a Brunswick site in Melbourne’s north for a 250-unit apartment complex in recent weeks, joining Mirvac and local partner, developer Milieu for the 500-apartment Albert Fields project in the suburb, on a combined one-hectare site.
Mirvac also has major projects next Queen Victoria Market and at Spencer Street in the CBD, while Canadian group Oxford is planning a $450 million development with over 700 units in the inner western suburb of Footscray.
