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
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
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
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?
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
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.
