The Melbourne property market is abuzz with news that a prime residential development site in the CBD has doubled in value in just two years after securing a planning permit for more than 1,000 apartments.
Colliers International’s residential site sales specialists Trent Hobart and Bryson Cameron have sold 8 Bouverie Street in Carlton on behalf of CES Victoria (Vic) Pty Ltd, a subsidiary of CEL Australia, to an undisclosed buyer for $64.8 million.
“It’s an unbelievable result for our vendor, we sold the property to CEL only two years ago and they have now doubled their investment,” Mr Hobart said. “And for the international buyer, this will be one of the highest profile projects for 2015 in the southern hemisphere, right in the middle of the University precinct at a time when no other projects are in the market in the CBD.
“It’s the perfect opportunity to capitalise on the strong residential market in the world’s most livable city."
The 2,927 sqm property – Melbourne’s largest approved and permitted development site – generated a hot contest among potential purchasers.
“Interest was compelling and competition fierce,” Mr Cameron said. “In the running was a broad cross-section of local and offshore buyers, all clamouring to get their hands on this outstanding development opportunity."
Following the announcement of the deal on the Singaporean stock exchange, local developers, investors and agents have been abuzz with the news of the sizeable sale.
“This is a record sale result for Carlton, one that many thought was not achievable,” Mr Hobart said.
“But we understand the dynamics of the residential market, we understand that the speculated supply concern is in fact the opposite – there is no availability of projects in the Melbourne CBD right now.
“Understanding the market gives us the advantage of being able to accurately advise our vendors of the optimal time to sell their assets, and helps educate our offshore buyers about the great opportunities for investment and development into Melbourne right now.
“This was the first major development site listing for 2015 and the largest permit-approved apartment site offered for sale since the former Age site at 250 Spencer Street in Melbourne was sold by Colliers International in 2013."
Located on the south-western corner of the former Carlton United Brewery site, 8 Bouverie Street was purchased by CES in March 2013 and now has an approved permit for 1,037 apartments plus associated retail.
“This property represented a genuine opportunity for developers on a world wide scale,” Mr Hobart said. “There is demand for opportunities of this kind from local institutions and large-scale developers from Australia and across the globe.
“It’s rare to be able to buy a site of this magnitude that is ready to be developed. The location is prime, the timing is right with almost no competition with other large scale projects in the Melbourne CBD, and the residential market is strong.
“The site is situated right in the middle of Melbourne’s world renowned Melbourne University and RMIT campus precincts and, being on the doorstep of the Melbourne CBD, it remains distinctly residential,” he said.
“The approved development has been designed by architects Elenberg Fraser and incorporates the bluestone façade of the former Carlton & United Brewery site at the base of this 78-level architectural landmark. This is a dense permit that may never be repeated in Carlton.
“This is Melbourne’s largest approved and permitted apartment site, which offers an opportunity to transform the skyline of the world’s most liveable city and capitalise on the strength of Melbourne’s real estate market."
Mr Cameron said: “8 Bouverie Street will experience exceptional demand for the apartments after the sale of the site is completed, similar to that of other developments such as Aurora, EQ Tower, Empire and Lighthouse."
The former Carlton & United Brewery site was purchased by Grocon in its entirety in 2007. Grocon has since completed the 32-level Swanston Square development and is about to commence construction on the sold out 22-level Bouverie Street Apartments. Colliers International’s residential project marketing team was responsible for both sales campaigns.
Mr Cameron said the lion’s share of Melbourne’s population growth was driven by the education sector, with many new residents aspiring to live near the city’s thriving universities.
“The Melbourne CBD experienced the highest population growth in suburb by percentage in 2014 and Carlton is now expected to follow suit,” Mr Cameron said.
“With the recent change of State Government, we expect to see the flow of approved planning permits become more moderated while the new government settles in. This will only serve to increase the value of approved permits to developers in the short to medium term, making opportunities such as this one at 8 Bouverie Street quite rare.”