Boutique developer CostaFox has sold its permit-approved development site in the former industrial suburb of Cremorne for $50 million.
Investment firm Bayley Stuart Capital has snapped up the 1,180sq m development site in a fund-through deal, securing an asset within one of Australia's hottest commercial markets where rents are surging well past $500 per square metre and vacancy currently sits below 1 per cent.
The Bayley Stuart Capital platform typically brings together syndicates of 20 to 40 investors for assets valued $50 million to $100 million.
The deal was stuck at a rate of $10,000 per square metre, a new benchmark for a unbuilt, unoccupied office building in Melbourne's inner-east.
The suburb of Cremorne, located on the banks of the Yarra has undergone rapid urban renewal over the past two years, becoming a hub for the creative and technology sectors.
Top-tier businesses Tesla, Uber, the Walt Disney Company, Carsales.com.au and REA Group are all set to make the suburb their permanent headquarters moving forward.
Developer CostaFox, which has a Sydney and Melbourne-focused development pipeline of about $500 million, acquired the site, located at 1-11 Gordon Street, for $12 million in February of 2018 from Icon Development’s Ashley Murdoch.
The site holds an approved planning permit for 5,000sq m of NLA spanning seven-storeys, with 900sq m floorplates.
The eventual Fieldwork-designed commercial building, dubbed the Gordon Street Offices, will be the latest addition to a string of new commercial development in Cremorne, albeit the first strata-titled commercial offering in the area for some time.
The existing brick warehouse’s listed heritage facade will be retained, with the curtain glass rising up behind to a rooftop garden with barbecue facilities, eating area and meeting rooms embedded in the greenery for tenants.
“We’ve taken some of the amenity offered in luxury residential apartment buildings and implemented it into our office building,” CostaFox development director Geno Hubay said.
“Tenants have a common area that they can use free of charge and includes a BBQ area in a garden environment.”
CostaFox has appointed builder Hacer and we will be commencing construction this year with Bayley Stuart Capital to fund the construction and take on all the leasing risk.
The project will aim for a Green Star 5 Star rating and incorporate solar panels, sustainable features, urban art and activate “all street frontages”. A retail component will be integrated on the ground floor.
New owners Bayley Stuart, made a similar play last year purchasing developer Icon’s $50 million under development tower at 600 Church Street, soon to be home to property portal Domain.