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New key development sites hit the market

Another month sees another batch of significant development sites come onto the market. 2014 has been an excellent year for both vendors and agents as the rush of predominantly Asian developers into the local market has in turn coaxed further landlords to sell their properties in the hope of excellent returns.

Recent weeks have seen some publicly recongisable development sites listed with Nylex Richmond and the Sir Charles Hotham Hotel in Melbourne's CBD headlining the list; the most notable of which are seen in further detail below.

A grand lady of the CBD

Images courtesy CBRE

The magnificent Sir Charles Hotham Hotel is back for sale after last changing hands during 2012. With an area in excess of 2,000sqm the site has been touted as having strong redevelopment potential for one if not two towers.

Elsewhere, one of the CBD's big development sites has also been offered for sale at 572-580 Lonsdale Street. With a concept design in excess of 250 metres in height, it's sure to arouse the interest of local and international developers.

Doing what it does

295 City Road & 81-87 City Road. Images courtesy Vinci Carbone & CBRE

Southbank keeps churning along with three new listing appearing in recent times. Seen above are concept designs for 295 City Road and 81-87 City Road while 42 Moray Street is also on offer. They join 88 Queensbridge Street which interestingly enough has yet to secure a buyer after some months on the market.

295 City Road above is more than interesting given the concept render associated with the sales pitch. The tower seen above scales to in excess of 300 metres; quite impressive for a site of 1,280sqm.

This Richmond soufflé rises again

Image courtesy Colliers

Buy, sell, hiatus, repeat. Colliers have listed for sale 2-8 Gough Street, Richmond - better known as Richmond Silos or Nylex site with its famed clock.

Its most recent chapter saw Planning Minister Matthew Guy announce a grand redevelopment for the site which would included dual 20 level towers, only for the project to fizzle out. As it stands the Nylex/Richmond Malt site is still one of Melbourne premier development sites, with a public profile to match.

A litmus test?

Images courtesy CBRE & Colliers

Two Fishermans Bend sites within close proximity to one another will act as barometers of sorts for the Urban Renewal Area. With a number of proposals gaining approval this year, the focus will slowly shift toward delivery of these towers.

MAB Corporation is seeking to offload 15-87 Gladstone Street, South Melbourne complete with planning approval for three towers and 733 apartments while the nearby 93-95 Montague Street, South Melbourne is available for sale with no plans as yet in place. With the precinct subject to no new planning applications of late, buyer demand for both projects will tell the tale.

Western exposure

Images courtesy Clarke Hopkins Clarke and DTZ

Melbourne's west continues to churn out sites capable of handling substantial apartment developments. The two most recent are 72-76 Paisley Street, Footscray and 1 Devonshire Road, Sunshine, both with concept designs seen above.

The abundance of large formerly industrial sites coupled with local councils intent on encouraging urban renewal has led to many notable projects in Footscray, Sunshine and Maribyrnong. 2 Hopkins Street, Footscray and 2 Wests Road, Maribyrnong are also on the market, both with endorsed plans for multiple apartment buildings.

Comment

2014 has definitely been year of the Asian developer, but will the trend continue? Having spoke to a handful of industry participants on the topic the overall consensus is that if current conditions/parameters remain the same then the answer is yes.

Put simply Asian-based or Asian-backed Australian developers work at different economies of scale. Where a local developer may size up an inner-city development site for say 300 apartments based upon initial capital expenditure, project financing costs and likely sales targets etc, an Asian developer may view the same site as worthy of 1000 apartments based upon their evaluation figures for the same criteria.

Therefore the 'excessive' prices being paid for development sites in recent times by Asian developers may not be the out and out frenzied buying as if some sort of fad as has been observed domestically, but a reflection of different expectations and capabilities being borne out of the sales price.

Having said that it's far easier to talk on what is than what will be.

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16 comments

Melbourne_Fragments's picture

As for Charles Hotham, leave it alone, those art nouveau interiors don't need to dissapear for towers looming over the shell of a facade, which is probably the only likely development proposal
http://www.theage.com.au/victoria/visit-melbournes-top-15-best-unprotect...

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3000's picture

Agreed.
This is getting ridiculous, Mathew Guy abd his cashed up asian devs are gutting melbourne.
Asian devs have no incentive to retain anything any heritage site build on bc they have always been given a free reign. They don't care if we lose landmarks or beautiful buildings.
I await some lifeless 250m+ proposal with zero heritage inclusion and ugly podium to go there.

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Bilby's picture

Charles Hotham and the historic coffee palace next door are not development "sites" - they are some of Melbourne's best intact, listed heritage buildings and deserve to have full conservation management plans implemented before developers can even begin to consider what they might do with them. The Charles Hotham is one of a very few intact large Art Nouveau buildings remaining in Melbourne, and it was designed by on of our most prominent Victorian era architects, William Pitt. How much more significant does a building have to be before we give it the respect it deserves? In restored form, these buildings represent Melbourne's future. If we ruin them, including their remarkable intact interiors, we damn the city to the practices of the past - and in particular, the bad old days of the 1950s and 60s, when demolition of heritage places ruled.

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Nicholas Harrison's picture

Another frustrating gap in heritage overlays in the City of Melbourne is the lack of a comprehensive study of potential heritage interiors in the city.

The planning scheme allows for the protection of heritage interiors ,and a few already are, but the City of Melbourne knows that there are many more buildings in the city that easily deserve this level of protection but don't have it.

Many property owners or developers have no idea how significant the interior of their buildings are and presume if it is not heritage listed then it must not be significant.

Having clear and up to date heritage controls is also good for developers as they are less likely to face the circumstances where they design a project based on the property having no heritage significance only to be told half way through the planning process that actually it does. This just wastes everybody's time and money.

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3000's picture

Well somone tell this to Mr. Guy. Tbh I don't know how he decides to measure heritage importance.

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Nicholas Harrison's picture

It is easy to blame Mr Guy but City of Melbourne should have done this stuff 10 years ago.

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3000's picture

I don't think they saw the apartment boom coming so hard.

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Paul Anderson's picture

Would be seriously depressing if a developer were allowed to come in and destroy the Sir Charles Hotham Hotel. Buildings like this should be untouchable in our city.

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Bilby's picture

No less important is the McCaughan's Coffee Palace next door to the Charled Hotham (the rather austere Queen Anne Revival building with the Classical gable pictured in the top photo). It might not look its best right now (the paint colours and street awnings don't do it justice), but it is Melbourne's second oldest Coffee Palace, also designed by William Pitt (of Federal Coffee Palace fame) and Charles D'Ebro. It's citation (and that of the Charles Hotham next door) can be read about here in the C186 heritage amendment: http://www.melbourne.vic.gov.au/BuildingandPlanning/Planning/planningsch...

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johnproctor's picture

listed as B (Charles Hotham) and C grade (McCaughans) respectively in a review by Council from 2011.

I agree with the comments above that it would be great to avoid significant gutting of both buildings but its hard to see that happening given these gradings in such a recent study.

best best is maybe the Hotham being converted into a 'heritage apartments' type component of a larger development in the rear of the McCaughans site - with McCaughans facade and maybe 10 metres of depth maintained.

not saying its what I want to see or what I would do with it as a developer saying from my experience in watching developments in Melbourne thats about the best we can hope for.

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Melbourne_Fragments's picture

^ that wouldn't actually be a horrible outcome John if the tower decent design and it meant all the heritage bits inside Charles Hotham (or even just ground level rooms and first floor stairwell) were kept, don't think the Coffee Palace next door has anything interesting inside. Unfortunatly in the current planning climate it's most likely we'll see a complete facadism for twin towers with 2 metre setbacks or something...can hope for better though

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Nicholas Harrison's picture

I think it is likely that the old Coffee Palace will be facaded and the first 5-10 metres of the Charles Hotham will be retained.

I think a single 150m high tower will rise above and it will be setback 5-10 metres up to around 40 metres when the setbacks will be reduced to 3-5 metres.

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Bilby's picture

Is that a good or bad outcome, in your view, Nicholas?

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Nicholas Harrison's picture

It could be a good design outcome subject to detailed design and more information about the interiors of the Charles Hotham. I am also presuming that little, if any, of the original interior of the old Coffee Palace remain.

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Bilby's picture

I don't know anything about the inside of the Coffee Palace. Has anyone here been inside that particular building? The Charles Hotham is something of an Art Nouveau gem, however - not too much remains of that particular era in Melbourne, inside or out!

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Nicholas Harrison's picture

Had a relative that stayed at the Pensione and it was very modern inside. The handrails on the stairs and a few archways inside seemed to be all that was left.

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