Record price for West Melbourne site as developers left hungry

Colliers International continues to field strong interest in sites across the CBD

Strong competition from several hungry developers has resulted in a record sale price for a well located West Melbourne development site.

Colliers International’s Daniel Wolman, Matt Stagg, Oliver Hay and David Sia have sold 407 King Street to a boutique Asian developer for $14.6million. The property last changed hands in 2013 for $7.05million.

Mr Wolman said there were many disappointed buyers who missed out on the property, who were keen to capitalise on the prime fringe location close to Flagstaff Gardens, the new Haileybury College city campus next door, public transport amenity including Flagstaff train station and the circa $450million Queen Victoria Market Precinct Renewal Project.

“This asset generated global interest from all buyer categories, from owner occupiers and investors to developers,” he said. “Many hungry developers and other buyers were left disappointed to miss out.

“The intense appetite for development sites in Melbourne – and particularly this pocket to the west of the CBD – has shown no signs of abating. Over the last 12 months, we have facilitated the sale of 420 Spencer Street for $29million, 383 King Street for $52million, 511-525 King Street for $10.5million and now 407 King Street."

Mr Sia said previous sales had averaged around $11,000/sqm on land in West Melbourne.

“407 King Street fetched $15,800/sqm,” he said. “This record sale price demonstrates the demand for CBD properties by overseas buyers, particularly when a property is put through a competitive international campaign.

“There are many disappointed buyers that have missed out, who are still looking for sites in the Melbourne CBD. We see no signs of demand slowing down in the year ahead."

The deal comes on the back of Colliers International’s sale of 11 Hancock Street in Southbank for $3.1million to a private local developer, in conjunction with Raff De Luise of ICR Property.

“This sale represented a rare and highly sought after opportunity to acquire a magnificent development site, with a permit for a landmark residential tower, within Melbourne’s Crown Casino entertainment precinct,” Mr Wolman said.

“It is one of the last sites in Melbourne with a permit for a high rise tower, to 33 levels, and high profile corner land holdings such as this are also in short supply. As such, we fielded significant interest in what was a very affordable development site on the cusp of Melbourne’s popular city fringe."

The 168sqm site was offered with approval for the construction of a 33-floor, 58-apartment tower.

“These sales follow on from a strong finish to 2015 in terms of demand for city fringe development sites,” Mr Hay said. “2016 has seen a strong continuation of 2015’s trajectory, with a flurry of marketing activity in West Melbourne and Fishermans Bend in particular.

“We continue to receive global interest for value-add opportunities in the CBD, such as the upcoming sale of 51 Queen Street.”

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