Developer competition driving Richmond development site sales

Richmond development sites are benefiting from the ongoing demand for office space and the declining demand for residential projects.

Larry Takis of local commercial property agency Teska Carson said as development site availability is drying up the competition, every opportunity has swelled considerably and they are seeing strong results.

Teksa Carson have sold nearly $18 million worth of development property in since December.

They recently sold a colourful development site at 45 Vere Street (above), which went to a local developer for $5.85 million on a 2.1 percent yield.

There were four developers bidding for the property, which saw a competitive 55 bids before the hammer came down.

Teksa Carson agent George Takis, who sold the property with Larry, called it an 'outstanding result.'

"This was an outstanding result driven by the incredibly hot market for city fringe development sites, especially in and around Richmond," Takis suggested.

"The difference here was the commercial zoning, which lends itself to flavour-of-the-month office development." 

The property comprises two commercial buildings over 1300 sqm including a modern office/warehouse of 323 sqm and a second, older 1000 sqm building.

Both buildings sit on a 1560 square metre site zoned Commercial 2.

The property was sold subject to several short term leases currently returning approximately $122,000 per annum net.

The sale follows several other developer purchases in Richmond, most recently that of 152-154 Murphy Street which was purchased by a developer for $3.55 million, more than $500,000 over the vendor’s reserve.