A prized St Kilda island site spanning 1,370sqm on busy St Kilda Road has been snapped up for $7.9 million as the suburb continues along the regeneration path.
Fitzroys’ Mark Talbot and Shawn Luo, together with Danny Clark and Michael Gross of Gross Waddell ICR, sold the high-profile property at 344-360 St Kilda Road on behalf of an owner who accumulated the site over multiple transactions.
Talbot said the purchaser, a local developer, intends to utilise the site’s existing permit for a premium six-storey mixed-use development, with a net saleable area of 4,743sqm and residences designed for the growing downsizer and owner occupier segments of the market.
The site currently comprises a high-profile single-level showroom and office generating significant holding income from tenants Tradelink and SMR Advertising, and traded on a sharp 2.4% yield.
“The market recognised this site as the largest development opportunity in the suburb for some time, with nearly 200 enquiries received from enthusiastic parties,” Talbot said.
The site is ideally positioned close to hospitality and lifestyle precincts including St Kilda beach, Fitzroy and Acland Streets, Albert Park, Carlisle Street, and Chapel Street.
“The huge enquiry and a result that exceeded expectations reflects confidence in the inner bayside market,” Talbot said.
“St Kilda is undergoing a path of regeneration and a experiencing somewhat of a demographic shift. There’s a host of residential, retail and commercial projects that promise to bring a new vibrancy to a famous Melbourne location.”
House prices in St Kilda west have been rising, and Gurner’s sold-out, ultra-luxe Saint Moritz apartment project is under construction on the former Novotel site. Meanwhile, the $30 million Victorian Pride Centre is set to open early next year on nearby Fitzroy Street, which will also welcome boutique hotels, again by Gurner on the former Cushion Lounge site, and Erdigroup’s QT on the Rydges site. The Prince of Wales Hotel is currently being refurbished and The Esplanade has just reopened.
“St Kilda’s lifestyle attributes makes it uniquely attractive to a number of demographics, and its catchment comprises established, affluent and transient cohorts. The return of international tourists and a return of confidence in state borders being open bring further activity and vibrancy to the area.”
Luo said investors are beginning to return to the residential market, joining the heightened demand from owner occupiers.
“The increasing acceptance of flexible working arrangements has put Melbourne’s highly accessible inner suburbs with attractive lifestyle and hospitality amenity firmly in the spotlight for residents, businesses and workers.
“Investors are recognising the growing attraction towards more spacious apartments with working from home spaces in inner-city locations, making projects such as these all the more attractive for developers.”
Clark said the site’s lucrative Commercial 1 zoning offered the chance to redesign the permit with a wide variety of potential outcomes.
“Enquiry came from developers looking to take on the existing permit, as well as many looking to explore alternative outcomes for the site, including commercial, hotel, retail and redrawn residential plans, attracted to the changes being seen in the area.”
Clark said accessibility is high on the priority list for developers, owner occupiers, and businesses, and the site is on one of Melbourne’s main inner-city arterials serviced by multiple tram routes at its doorstep, walking and cycling trails and Balaclava train station.