Fierce bidding for a Richmond development site culminated with a private buyer securing the property for $18.2 million - $4.5 million above reserve.
CBRE’s Victorian Development Sites team of Mark Wizel, Julian White and Paul Tzamalis negotiated the sale of 370-374 and 376-380 Swan Street, which represented the second successful sale of a prominent Swan Street site by CBRE within as many weeks.
At the conclusion of the Expression of Interest campaign, 15 offers were received between $10 million and $12 million from local and offshore groups. As a result of this strong level of interest, a strategic decision was made to sell the 2,151sqm property via an exclusive ‘showroom’ auction.
As a result, fierce bidding was witnessed at the auction - with bidding from eight different parties.
Mr Wizel said whilst the buyer was local, the prominence of Chinese under bidders confirmed that offshore developers are actively seeking development opportunities that they can land bank in the short to medium term, implying the long term view of their investment.
“It is also becoming apparent that suburban locations, such as Richmond, which have historically not been popular with Chinese buyers are now well and truly on the radar,” said Mr Wizel.
Mr White said the sale price indicated a rate of nearly $8,500/sqm - a clear record for Commercial 2 zoned land in Melbourne.
“Prime land banking opportunities with solid holding income continue to surface as a primary choice for developers, with buyers attracted to the potential to add to the development pipeline for the future,” Mr White said.
“Areas such as Swan Street, Richmond, as well as other urban renewal precincts in Collingwood, Abbotsford and Cremorne are high on the wish list for all developers,” Mr White added.
The private vendor had owned the property for decades and deemed the current strong development appetite in the Richmond area as an ideal time to sell.