The massive 4645 square metre site could yield up to three major skyscrapers, possibly more, sources say, once Clemenger BBDO vacates in 2015.
Towers would replace a low-rise office building and a much needed 574-bay car park, spread over two blocks, in the middle of the tree-lined boulevard.
Marketing agent Jones Lang LaSalle said negotiations to sell the building were continuing.
An ISPT representative was unavailable to comment on speculation the building is in due diligence with a new buyer.
Elsewhere in the area, residential developers have been snapping up St Kilda Road’s dilapidating office buildings, which often sit on large blocks, with the view of converting them into apartment complexes.
Most St Kilda Road skyscraper redevelopments would offer residents views toward the CBD, Fawkner Park, Albert Park Lake, Hobsons Bay and Port Phillip.
Earlier this week, it was reported a new train station could be developed at the site of the Domain tram depot – some five blocks away, from 474 St Kilda Road.
The lack of a train station in the precinct area has been blamed as a reason prospective office tenants have snubbed St Kilda and Queens roads, in preference for Docklands, Southbank, and in some cases, suburban offices.
Many historic homes were demolished along St Kilda Road and Queens Road to make way for offices which are now amongst the cheapest to lease in Melbourne.
The conversion of vacant office space, to apartments over the past fifteen years has hidden what could be a very high office vacancy rate.
It’s expected the wave of new residents will result in the need for retail space at the ground level of many St Kilda Road buildings, including bars, cafes and restaurants – something the precinct is often criticised as lacking by its residents.