A collective of 20 apartment owners are joining together to sell their properties in one-line, marketing the site with development potential in Melbourne’s sought-after St Kilda Road precinct.
The 20 owners hope to secure around $25 million for the four-block apartment complex, which would provide them with a substantially better return than selling individual properties. The building currently comprises 12 two- and eight three-bedroom apartments.
Amalgamated development sites have proven to be successful in Sydney following the implementation of strata reform legislation which allows owners to join together in a collective sale under the 75 per cent renewal rule.
The apartment complex, Coventry Square, is located on a 1,483 square metre site at 77 Coventry Street, South Melbourne.
The 20 owners approached RPM Real Estate, and the deal was put together by Ed Wright and Christian Ranieri of RPM.
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Wright said the vendors approached him with a view to unlocking the value of the land they were sitting on by selling collectively.
“Like a lot of Southbank owners, they’re seeing the land asset they’re sitting on is very valuable.
“In particular, the site’s proximity to the Sturt Street arts precinct will be very attractive to boutique hotel groups seeking to secure a foothold in the Melbourne market,” he said.
“The landholding is in a highly sought-after precinct with numerous apartment developments and permit approvals on surrounding sites. [We] think it will appeal strongly to not only developers but investors as the offering has the added benefit of being able to generate holding income allowing them to land bank the site in anticipation of the next property cycle.”
Indicative rental returns on the units are in the order of $500-530 per week for the two-bedroom apartments and $630-660 per week for the three-bedroom apartments and would provide a strong holding income stream while future development approvals are being sought.
Wright said the St Kilda Road precinct has seen a number of development approvals make their to surrounding sites, indicating a new cycle of action in the area for developers to cash in on.
“We think it will appeal strongly to developers and investors as a rental income stream, and land banking the site in anticipation of the next property cycle.”
The public expression of interest campaign closes 8 March.