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THE pace of capital growth for development sites continues unabated following a record $14.6 million deal in West Melbourne.
The property, located at 407 King Street, has been sold to an Asian developer for $15,800 per square metre, a significant premium to average sales in the area of about $11,000 per square metre.
The deal has also snared the seller a gross profit on the investment of more than $7.5 million in just three years. The property last changed hands for $7.05 million in 2013.
Daniel Wolman, who was among a team of Colliers International agents who negotiated the sale, says the prized site was hotly contested due to its prime fringe location near Flagstaff Gardens and the $450 million Queen Victoria Market precinct renewal project.
"This asset generated global interest from all buyer categories, from owner occupiers and investors to developers," says Wolman.
"Many hungry developers and other buyers were left disappointed to miss out.
"The intense appetite for development sites in Melbourne, and particularly this pocket to the west of the CBD, has shown no signs of abating.
"Over the last 12 months, we have facilitated the sale of 420 Spencer Street for $29 million, 383 King Street for $52 million, 511-525 King Street for $10.5 million and now 407 King Street."
The deal comes on the back of Colliers International negotiating the sale of 11 Hancock Street in Southbank for $3.1 million to a local developer, in conjunction with Raff De Luise of ICR Property.
"This sale represented a rare and highly sought after opportunity to acquire a magnificent development site, with a permit for a landmark residential tower, within Melbourne's Crown Casino entertainment precinct," says Wolman.
"It is one of the last sites in Melbourne with a permit for a high rise tower, to 33 levels, and high-profile corner land holdings such as this are also in short supply.
"We fielded significant interest in what was a very affordable development site on the cusp of Melbourne's popular city fringe."
The 168sqm site was offered with approval for the construction of a 33-floor, 58-apartment tower.
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