Melbourne property developer Caydon has acquired a former market site in Moonee Ponds with plans to build a $650 million residential community.
It's one of the largest suburban development site transactions in Melbourne in the past five years.
CBRE negotiated the sale of the strategically located, 13,400sqm site in conjunction with JLL.
Located at 40 Hall Street and 34-36 Margaret Street, in the heart of Moonee Ponds, the site has a concept plan for a $650 million, multi-staged development comprising approximately 1,200 apartments in additional to retail and office space.
“The sale is a clear demonstration of the confidence that local developers have in the residential apartment market within 10km of the Melbourne CBD,” CBRE Director Mark Wizel said.
The site is currently leased by Carepark and is situated just six kilometres from Melbourne’s CBD.
It was recently offered for sale in a public Expressions of Interest campaign on behalf of joint owners Leighton Properties and Qualitas.
Given the scale of the site, and the proposed concept plan, Mr Wizel said buyer interest had centred on the potential to develop the asset as a new mini suburb.
Caydon Principal Joe Russo said the company intended to revitalise the under-utilised site and create a destination hub, complete with retail and office space.
“The acquisition fits with Caydon’s strategy to develop inner city neighbourhoods where people can live, work and socialise close to public transport, retail amenity and parklands,” Mr Russo said.
“The site benefits from its proximity to a thriving eclectic retail strip, being Puckle Street, in addition to two major shopping centres. Most importantly, the train station opposite the site means that no apartment will be further than 200 metres from public transport.”
Leighton Properties and Qualitas acquired the 1.34 hectare site from Reading International in October 2013. The land is zoned Commercial 1, which allows for mixed use. A development plan overlay is presently with the Victorian Government for approval.
Mr Wizel said the sale had been finalised amid a significant shift in the Melbourne housing market, which was underpinning the current strength in the suburban residential development site market.
[tweet_dis]“We are seeing a growing shift towards apartment living in the face of rising house prices, which is providing opportunities for the local property and building industry,”[/tweet_dis] Mr Wizel said.
“Whilst Asian led consortiums continue to dominate the skylines of the Melbourne CBD, it has been a handful of strong local developers such as Caydon that have led the way in the suburbs to satisfy the current buyer demand.”
Caydon has been one of the most active non CBD residential developers post the GFC with major projects in Prahran, Hawthorn, St Kilda and Brunswick.
“We have delivered a range of successful projects, with our STK project virtually sold out and well into construction and we expect to commence building on our "Only Flemington" project in a matter of weeks,” Mr Russo said.
“We have found that there is a deep owner occupier and investor market for product that is well designed, functional and surrounded by first class retail, lifestyle and transport amenity. Only Flemington is a great example of this, having generated a groundswell of interest from local owner occupiers and investors.”
The Moonee Ponds acquisition is the latest for Caydon, following its late 2014 acquisition of the Richmond Malt site on the immediate fringe of the Melbourne CBD.
“We now control well over 3.5 acres across this site and are working very hard behind the scenes to design something that is distinctive for that location and of a quality that has never seen before in Melbourne,” Mr Russo said.
Caydon is expected to announce plans for the Moonee Ponds site in the coming weeks.