This article is from the Australian Property Journal archive
DEVELOPER V-Leader Group has abandoned its $400 million office plans by putting 600 Lonsdale Street, one of the last major corner sites in the Melbourne CBD, on the market with a $65 million price guide.
The empty lot was once the home of the former Lonsdale Court building and is being sold with a permit approval already in place for a 40-level tower with more than 45,000sqm of gross floor area.
Daniel Wolman, Oliver Hay and Leon Ma from Cushman & Wakefield are managing the sale via an expressions of interest campaign, on behalf of property developer V-Leader Group.
“The location of 600 Lonsdale Street, in the prestigious legal and premium residential precinct, provides a rare opportunity to secure a major CBD corner site,” said Wolman.
“This site offers a significant opportunity to develop within one of Melbourne’s most connected and sought-after areas.”
The site’s Capital City 1 zoning would enable future developers with a diverse mix of outcomes from the property including commercial, luxury residential, build-to-rent, student accommodation, and hotel development
“Developers will appreciate the site’s extensive de-risking, with pre-construction work completed, allowing for an immediate start to the project,” said Hay.
“The surrounding neighbourhood is undergoing substantial redevelopment, enhancing the vibrancy and appeal of the area, making this a rare opportunity to shape the future of Melbourne’s CBD skyline.”
V-Leader bought the site in May 2018 for $48 million through the purchase of most of the existing strata office building on the corner of King Street, and picked up the final strata unit in 2019 for $4 million.
The developer gained approval for a hotel development for the site in 2020, before plans were changed and approved for an office building in 2022.
The listing comes as Melbourne’s office market continues to face challenges with MSCI data showing the price gap expectations has ballooned from 20% to 35%.
So far MSCI data shows Melbourne office peak to trough values have fallen 21% in this cycle, which is more than the 14% decline recorded during (GFC). Based on the current data, it would imply values will need to decline by another 18% for liquidity to return to the market.
With V-Leader now offloading the property as it moves to reposition its portfolio away from the office sector.
The site at the corner of King Street and Lonsdale Street was cleared in 2022 to make room for an immediate development and offers prime access to major Melbourne arterial roads plus additional access via Flagstaff and Southern Cross Stations, which are just a short walk away.
Connectivity is further enhanced by proximity to Melbourne’s extensive tram network and direct access to the Airport and Tullamarine Freeway via King Street.
“With the Flagstaff Gardens and the vibrant Queen Victoria Market precinct nearby, the location blends the best of Melbourne’s urban life with the calm of extensive greenery, making it highly desirable for both residents and businesses,” added Hay.
The expressions of interest campaign for 600 Lonsdale Street is scheduled to close on 17 October 2024.
