AEU to bank c$20 million from sale of riverside Melbourne site it recently had rezoned

The property being offered (shaded) is next door to an office the AEU bought in 2011 (marked).

The Australian Education Union Victorian branch is selling one of two adjoining properties it owns on the banks of the Yarra River in Melbourne’s inner north-east suburb of Abbotsford.

At 112-124 Trenerry Crescent, the 4735 square metre plot includes a four-storey red-brick warehouse built in 1927, known as the Austral Silk and Cotton Mills, which the union had part-occupied as offices (and also leased out, as a landlord).

The AEU paid $8.5 million for this property (pictured top, left and bottom) 20 years ago. In 2011, it outlaid another $15.6 million to snap up the property next door – an office on about 2200 sqm of land.

Last year the AEU was successful in having its amalgamated holding rezoned from Commercial 2 to the more flexible, and valuable, Mixed Use.

This move “puts all [development] options on the table for purchasers”, according to selling agent Paul Burns, of Fitzroys, who is representing the AEU with colleague James Lockwood.

Located at a river bend, 112-124 Trenerry Crescent offers westerly views over Dights Falls. It also has an easterly aspect capturing the adjacent Victoria Park stadium, and the Melbourne CBD, which is about three kilometres away.

In the street, developers have recently been replacing former commercial sites with a mix of apartments and townhouses.

Numerous office proposals have also recently been earmarked in Abbotsford and the adjoining suburb of Richmond, including a strata complex, unveiled by CostaFox last month.

The offering (outlined) has gun-barrel views of Dights Falls.

“Cadence Property Group has lodged plans for a major office development on Victoria Crescent, near the Carlton & United Brewery, and Salta Property Group is undertaking a mixed-use project with office, apartment and build-to-rent components next to its Victoria Gardens shopping centre,” the agents said, adding that United Petroleum founder, Eddie Hirsch, is proposing an 11-storey complex on Hoddle Street.

Fitzroys campaign is targeting developers, investors and owner occupiers.

“The property offers direct access to trains and buses, the Eastern Freeway and recently upgraded Hoddle Street, and a range of trendy lifestyle options and the scenery of the Yarra River, all within short walking distance,” Mr Burns said.

“Meanwhile, Melburnians are continuing to embrace medium and high-density living, fuelled further by ongoing population growth, enhancing the prospects of a future residential development on the site”.

“Office vacancies across Melbourne’s city fringe markets have been tightening to historic lows and businesses are increasingly looking to Abbotsford as the next hotspot for commercial activity located close to the CBD.

Two weeks ago, a nearby low-rise office complex at 64-78 Trenerry Crescent, and zoned Commercial 1, which, like the AEU site, would allow for residential, sold for a speculated price of more than $40 million following a campaign targeting apartment builders.

In 2016, the Australian Nursing and Midwifery Federation sold its long-time 10-level headquarters at Melbourne’s 532 and 540 Elizabeth Street for $30 million, after spending $11 million in 2013 on a site at 529-541 Elizabeth Street, where it developed a new office.

Coincidentally another society – the Construction, Forestry, Mining and Energy Union (CFMEU) – acquired 532 and 540 Elizabeth Street.

The red-brick warehouse on tree-lined Trenerry Crescent.

Marc Pallisco

A freelance property writer and experienced analyst, Marc is the co-founder of realestatesource.com.au

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