The former ‘dodgy’ end of Melbourne’s CBD is getting a makeover with Grollo Group the latest to join the action after first making moves in the locale in 2016.
King and Spencer streets have been the focus of key development projects including the Batmans Hill Hotel project opposite Southern Cross Station, the Waterside Hotel and the Sir Charles Hotham Hotel.
Now, just a little further up King Street from the Yarra River end, and as Salter Brothers make plans to redevelop the Intercontinental Melbourne The Rialto complex, Grollo Group has singalled its intent to take on a joint-venture partner for its plans in the area.
The developer is listing four freehold buildings on the corner of Flinders Lane and King Street, next to the main Rialto complex, for a possible joint venture.
Grollo Group chief executive Lorenz Grollo said it was time to redevelop the buildings.
“The Rialto was a pioneering building 40 years ago and now the area has become a rapidly expanding mixed-use precinct,” he said.
“We made a bold declaration many years ago to change the face of King Street for the sake of Melbourne’s CBD and its many stakeholders, and we are proud that these buildings are now ready for their next stage of evolution.”
The four historic buildings encompass nearly 1500sq m of street frontage on three sides, including Kings Street and Geddes Lane.
It was part of Grollo’s push to ‘clean up’ the King Street Nightclub Strip in 2018 when, in partnership with the Kuwaiti-government-backed St Martins Properties, he bought the Inflation Nightclub at 50-54 King Street from Peter Iwaniuk.
Grollo also bought The Grain Store building at 46 King Street, which was built in 1854 and has more recently been Showgirls Bar 20. He paid a reported $13.25 million in 2016 for it—CoreLogic property records show a sale for $14.5 million in September 2016.
The York Butter Factory building now houses Lendlease’s offices at 62-66 King Street while 42-44 King Street is a steakhouse restaurant.
Grollo and St Martins bought the restaurant premises in 2006 for $2.9 million but have long held the York Butter Factory building.
All four buildings were owned by Grollo Group and St Martins Properties by 2018 though CoreLogic records show some sales for some of the buildings in 2020.
JLL executive director Josh Rutman, Nick Peden, Will Connolly and MingXuan Li are handling the international expressions of interest campaign, which closes October 25.
“Each building possesses a distinct character and charm, and boast dual street presence along King Street and Geddes Lane, which could provide for a range of quality outcomes, including high-end boutique hotel, quality commercial office or a landmark food and beverage venue,” Rutman said.
More than 35,000 workers are estimated to be in the area surrounding the four buildings on a daily basis. There are a number of office redevelopments in the locale.
These include Charter Hall’s completed stage 1 of its 555 Collins Street project with tenants including Amazon, Aware Super and Allianz, which is right across the street from the Grollo buildings.
“We are looking for a local or international partner that sees the immense potential of the area and the opportunity to create a new landmark that will leverage off the substantial growth of the precinct,” Grollo said.
Justin Hemmes’ Merivale Group and Chris Lucas have already invested in restoring older buildings in Melbourne’s CBD for hospitality uses.
