Permit Approved La Trobe Street Site Hits the Block

Developer confidence appears to have improved with sites in Melbourne's key urban precincts of the CBD, Docklands and Fishermans Bend returning to the market.

The latest site to hit the market, a carpark, at the rear of 58 La Trobe Street, has been listed by Melbourne Domain, controlled by businessmen See Song Yew and Yew Kong Ling.

The 664sq m site, listed with price expectations of $20 million, was purchased by the pair in 2005 for $5.18 million and was converted from an existing four-level 1950s-era office building to a residential offering in 2008.

See Song Yew and Yew Kong Ling, who work under the entity Melbourne Domain, also control Merlin Properties, which sought to build a tower above 441 Lonsdale Street, proposing a 50-storey tower to replace the historic Royal Saxon hotel.

Office vacancy rates within central Melbourne remain at historic lows and the city's residential market is starting to show some green shoots of improvement, which will further encourage would-be developers.

The property, being marketed by CBRE, will be offered to the with a rare permit for a 33-level mixed use development aligning with office vacancy rates within central Melbourne sitting at historic lows and the city's residential market is starting to show some green shoots of improvement.

“Given tightening planning controls in the Melbourne CBD over the past four years, coupled with the growing scarcity of available sites, permit approved and ready to go opportunities like this simply do not come up like they used to,” CBRE national director Mark Wizel said.

The site, located within the booming north eastern precinct of the Melbourne CBD, is in close proximity to RMIT University, Melbourne Central, Carlton Gardens and the State Library of Victoria.

The mixed-use potential of the site could also see a new student accomodation building with student numbers in Australia forecast to have the strongest growth in student-age population.

A record $1.46 billion has been invested in Australia's student accommodation sector so far in 2019, up 231.82 per cent from last year.

“The Melbourne property market currently has a number of highly favourable traits that are very relevant to this property,” CBRE national director Lewis Tong said.

“Both the University of Melbourne and RMIT have a large and growing proportion of international students, 36 per cent and 38 per cent respectively, that need to be accommodated close by.”

As developers jostle for tightly-held city sites, the squeeze has created intense competition for the few sites which do become available.

Late last year, diversified property giant Mirvac acquired a commercial office tower at 383 La Trobe Street, home to the Australian Federal Police, for $122 million from developer Sterling Global. Mirvac has plans for a 40,000sq m office tower worth $550 million or more.

Chinese developer Poly has also commenced work on its $500 million office tower at 1,000 La Trobe Street opposite Marvel Stadium in Docklands.

The 23-level Woods Bagot-designed tower will feature 40,000 square metres of lettable area.

Across the Yarra River in Fishermans Bend, Melbourne-based developer Capital Alliance has commenced work on its $200 million mixed-use project, The Normanby, located at 199-201 Normanby Road.

The 40-level tower will comprise the precinct's first hotel - a 200-room AC Hotels by Marriott —as well as 100 residential units.