This article is from the Australian Property Journal archive
SAM Tarascio’s Salta has tipped an office building in the East End of the Melbourne CBD to the market that could make way for a 52-level tower with luxe apartments and a hotel, with expectations at $75 million.
It will be hoping it’s second time lucky for the 13-level building at 63 Exhibition Street, which it offered for sale at the end of 2020 with hopes of $80 million. The market has since cooled.
The biggest transaction in Melbourne’s CBD in sluggish 2023 was the $56 million sale of adjoining art deco buildings Mitchell House and Milledge House at year’s close. A Chinese syndicate partnered with a local investor to buy the 358 Lonsdale Street asset on a 4.17% yield.
Global interest is expected for 63 Exhibition Street. Plans for development on the site, located to the immediate east of the renowned 101 Collins Street office building, were drawn up by architects Bates Smart and include almost 30,000 sqm of gross floor area.
The owner of the 57-level 101 Collins Street, the Commonwealth Superannuation Corporation, has reportedly just paid $7 million to buy two floors at neighbouring 55 Exhibition Street as it seeks to protect views from 101. It bought the third floor in 2021 for $4.75 million. Salta itself, meanwhile, owns three floors at 55 – in a bid to quell development next to its holding at number 63.
Salta had initially sought approval for a 64-level apartment and hotel at number 63 but plans were knocked back in 2018.
Formerly known as Citicorp House, the existing building was constructed in 1969 and extensively refurbished in 2003. It totals 6,135 sqm of net lettable area.
The property is being sold through JLL’s Josh Rutman, Nick Peden, Jesse Radisich and MingXuan Li. Expressions of interest close Wednesday, 6th March.
Rutman said the new building is located in the “platinum quarter” of the CBD, bordered by Russell, Spring, Flinders and Collins Streets in the centre of high-end hotels, retailing and apartments. The property is strategically located on the section of Exhibition Street bookended by prestigious Collins Street and eclectic Flinders Lane. The site sits immediately adjacent to the Hermès flagship store for Melbourne.
“Whether it is residential, hotels, retail, office or hospitality, physical space in the ‘platinum quarter’ of Melbourne’s East End comes at a premium, and is the most valuable and expensive real estate in Victoria,” Rutman said.
“One of the keys to Hermès’ success is their unwavering commitment to securing the highest calibre real estate in the most affluent and prestigious positions in major global cities. In the case of Melbourne, Hermès has long stood proud on the high profile corner of Exhibition Street and Collins Street, immediately next door to 63 Exhibition Street, which highlights the prestigious and desirable nature of this immediate location.”
Full-floor apartments at the top of the new building at 63 would feature views across the Yarra River, Botanic Gardens, and the CBD and suburbs beyond.
“The eastern core of Melbourne’s CBD has long been a recession-proof pocket of the city which, regardless of market cycles, continues to attract some of the world’s most prolific investors and developers,” Rutman said.
“Opportunities for high-density development in this tightly held pocket have been minimal in recent years due purely to the lack of remaining, unencumbered development sites available for purchase,” Rutman said.
