Colliers International expects keen interest in site’s future hotel development potential
A prominent Flinders Street commercial car park is expected to spark a contest among investors and developers keen to capitalise on the property’s strong cash flow and excellent future development potential.
Colliers International’s Daniel Wolman, Matthew Stagg and Oliver Hay have been appointed to sell the 1,270sqm car park at 380 Flinders Street on behalf of a private family that has held the property for more than 30 years. Agents expect the site to attract interest in the vicinity of $30million.
The site is expected to attract particular interest from hotel developers given its prime CBD location and potential for panoramic views to Southbank and Crown Casino.
The car park is managed by Secure Parking, with the top floor leased to AAPT for its fibre cabling network, as well as ground floor retail. The seven level, 315-bay car park is a purpose built facility, accessed via Flinders Street with two further entrances/exits to Foxton Lane and Tavistock Lane.
“Car parks are a scarce and tightly held asset class,” Mr Stagg said. “They are popular because they are a low maintance investment that generate strong long term cashflow."
The car park has a prominent location and is strategically positioned to attract strong weekday, weekend and afterhours patronage.
Mr Wolman said the property had excellent future development potential once leases expired. The site has three prime frontages, including one of the largest frontages to Flinders Street of more than 36m.
“The property is located next door to the former Fletcher Jones site at 1 Queen Street, which has a permit for 18 levels on only 746sqm,” Mr Wolman said. “It overlooks the Yarra River, with views directly towards the Crown Casino precinct.
“380 Flinders Street will undoubtedly become one of Melbourne’s most sought after locations for a high end luxury or boutique hotel. On offer is a very strong holding income from Secure Parking and AAPT while a new owner awaits plans and permits."
Mr Stagg said hotel vacancy rates in the Melbourne CBD were currently lower than they had ever been.
“Demand for hotel rooms in central Melbourne has never been greater, and a plethora of major names in the sector have recognised this need,” he said. “This includes a new Four Points by Sheraton opening in Docklands in 2017, a new hotel planned at Crown’s new towers on Queensbridge and plans for a hotel as part of Mirvac’s new project at 447 Collins Street.
“With its close proximity to Flinders Street station, the Collins Street financial precinct and the Bourke Street Mall retail precinct, not to mention its prime location directly opposite the Crown Casino precinct, there is no better location for a hotel in Melbourne."
Mr Wolman said with the low cost of debt and volatility in share markets, agents expected to receive competitive bids from long term passive investors as well as developers.