Sydney-based Avari Capital Partners will refurbish a heritage-listed West Melbourne office after buying it for $38.5 million from racehorse owner and hotelier Aziz “Ozzie” Kheir, Probuild founder Phil Mehrten and developer Frank Palazzo.
The private equity real estate fund has swooped on the former Sands and McDougall Manufactory building on a prominent city corner at 355-369 Spencer Street, a converted office that was originally part of major hotel development approved for the site.
The deal is the second in a week finalised by the Melbourne development trio.
They put the Spencer Street building and another two-storey brick warehouse built in 1914 at 102-108 Jeffcott Street on the market after deciding not to push ahead with a lauded 23-level hotel and office complex that received planning permission last year.
Once complete, the 180-room city hotel would have overlooked the Melbourne Assessment Prison.
The hotel project, now unlikely to go ahead, was viewed by city and government authorities as an “adaptive” and “highly responsive” use of the West Melbourne heritage listed site.
Instead, Avari will undertake an extensive refurbishment of the building, including a speculative fit-out, service upgrades, and adding end-of-trip facilities along with a bar and cafe in the building’s central courtyard, chief investment officer Alan Liao said.
“355 Spencer Street represents a structurally sound, superbly designed and aesthetically pleasing building. To knock it down and redevelop would not achieve its best and highest use,” he said.
“We believe this unique proposition will attract strong leasing interest and will ultimately improve the value of a magnificent building,’’ he said.
Last week, Mr Kheir and his development partners sold the warehouse with a hipped roof and double gabled facade at 102-108 Jeffcott Street to an unknown developer for $9.5 million.
They had jointly owned both buildings for about four years, paying $27.2 million for the Sands and McDougall factory. When the trio originally purchased the site with three properties, they paid $38.8 million.
The remaining property, also part of the original development, at 371 Spencer Street is for sale with an asking price of $10 million.
CBRE’s Mark Wizel, Josh Rutman, Scott Orchard and Scott Hawthorne have handled the sale of all the properties.
“In the context of the current market risk factors and forecasts for where the office market may be headed, the pricing is very strong,” Mr Wizel said.
Mr Kheir owns developer Resimax Property Group. His passion for racehorses connects him with Mr Mehrten, also a racehorse owner who dabbles in property development, while Mr Palazzo owns a large stake in home builder Symonds Group.
Two years ago, Avari paid a record $50 million for landmark office building in Wollongong at 90 Crown Street that transacted on a yield of 7.75 per cent and a weighted average lease expiry of 3.5 years.
This article is republished from www.brisbanetimes.com.au under a Creative Commons license. Read the original article.
Brisbane’s Office Market Greenlit for Business
Brisbane’s office market continues to shake off the pandemic doldrums with two new commercial towers approved in the CBD and fringe suburbs.
Property owner PGIM and development partner Indema’s plan for a bold adaptive reuse of a 1970s commercial building at 444 Queen Street has won approval.
The bronze 22-storey tower opposite Customs House will be stripped back to its core structure and completely remodelled with a new podium, curtain wall facade and an additional two-storey sculptural canopy.
Indema director Michael Bruderlin said they would be targeting a net zero certification for the building upon completion in the first quarter of 2024.
Article source: www.theurbandeveloper.com
Developer Pitches for $130m Shop-Top Housing on Bayside
Brisbane’s bayside could be going up in the world with plans for $130-million highrise shop-top housing in the heart of the seaside suburb of Wynnum.
Brisbane-based developer Hambros has lodged plans for a 21-storey apartment tower on the vacant lot neighbouring the Wynnum Central Shopping Centre, after winning approval for an small extension to the retail centre late last year.
The development comprises a 6-storey retail and commercial podium, with a 275-apartment tower above, backing on to Wynnum Central Park.
Hambros has reportedly spent about $14 million on revamping the Wynnum Central Shopping Centre on Bay Terrace, as part of a $74-million plan to rejuvenate Wynnum, including cinemas.
According to planning documents lodged with the Brisbane City Council, the tower will be made up of 54 one-bedroom apartments, 148 two-bedroom apartments, and 67 three-bedroom apartments, with six penthouses, which will have private rooftop space and their own pools.
The building height is well in excess of the allowable five to eight storeys in the Wynnum Manly Neighbourhood Plan, but town planners Gateway Survey and Planning argued the plan was “outdated” and should be overhauled.
The six-storey podium would contain two levels of parking, a retail tenancy at ground level, a floor of retail, with two storeys of commercial space for office, healthcare and events space on levels 5 and 6.
In a statement to the council Hambros director Justin Ham said the Wynnum CBD had been left behind “with no development occurring in the last 20 years”.
“Our project is designed to put Wynnum CBD on the ‘open for business’ map,” Ham said.
“This landmark development, with a construction cost estimated at $130 million will have a huge financial and community positive impact on the Wynnum CBD and surrounding areas.
“It’s a once-in-a-lifestime opportunity to create a beautiful space overlooking the best bay in the world.”
Ham said the development would bring much-needed foot traffic to the heart of the Wynnum CBD and help bolster businesses and landowners he said were struggling to remain profitable.
Taiwanese developer Shayher Group won approval for a masterplanned retail precinct at Wynnum Plaza with plans for 184 apartments across eight residential buildings as well as boutique cinemas and increased retail space, reportedly worth more than $100 million.
Work on the Wynnum Plaza redevelopment was due to commence later this year with a completion date hedged for 2024.
Article source: www.theurbandeveloper.com
More room in the Brisbane property price bubble but get ready for a reckoning, says bank
Brisbane’s house prices would continue to outpace the nation this year but a significant slump was near, according to the ANZ.
The bank’s economics team has revised its outlook for house prices and now tips a fall of about 3 per cent nationally this year followed by an 8 per cent fall next year. It had previously tipped a rise of 8 per cent this year and a fall of 6 per cent next year.
In Brisbane, the monthly growth rate has slipped down to about 2.5 per cent and ANZ expects a yearly rate this year of about 6 per cent with a fall of about 9 per cent next year.
The higher end of the market in Brisbane was also continuing to outpace the middle and lower price bracket in growth rates.
The downturn was being caused by higher interest rates and affordability issues and ANZ said the “wealth effect” would come into play which would spread the housing downturn to other areas of the economy.
“Falling house prices will weigh on consumer spending through the wealth effect, but high savings will provide a solid buffer,” ANZ said.
It expects the RBA cash rate to get to 2.35 per cent by mid-2023 while the market is tipping a 3.25 per cent. A cash rate of 2.35 per cent meant a variable rate mortgage of 4.75 per cent and a 3.25 per cent rate would increase variable loans to 5.65 per cent.
It said some people may struggle but forced selling because of higher interest rates was a low risk.
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