Australia Post to Sell Prized Melbourne Asset

Bunnings recently paid Australia Post $21 million for its former Port Melbourne logistics centre, where it was also a tenant.

Bunnings and Lowes are both prospective purchasers for the Docklands site, however given its location at the CBD border, it’s also expected to arouse developer interest

The Australia Post site is expected to fetch some $45 million and be replaced with a skyscraper compound, flanked by ground floor retail.

The former mail centre is surrounded to three sides by luxury apartments, hotels, offices, a stadium and a supposed high end shopping centre (the old DFO).

To the north, however, is a 21-year old jail, which because of its $80 million construction cost is still considered to owe the government too much for it shut and sell.

Coincidentally, Victoria Police is in the market as an office tenant, and sources say may pre-commit to one of around four towers that could raise from the site. The lower levels of any redevelopment are expected to become a shopping centre.

It’s widely expected train tracks that abut the Melbourne Assessment Prison and Australia Post’s outgoing sites will be “concreted over” in the medium term. This would create a floor for new buildings to be developed atop, similar to Federation Square or the new Age headquarters, nearby.

Australia Post confirmed the site will hit the market next month. CB Richard Ellis director Mark Wizel and Mark Costa are acting for the government arm but declined to comment when contacted by Capital Gain.

Earlier this week Australia Post announced overall profit dipped to $103 million this year, from $380 million.

This came despite managing director Ahmed Fahour successfully applying to the Australian Consumer and Competititon Commission last May to increase postage stamp prices for the second time in a only few months.

Australia Post also recently announced plans to shut 27 of its approximate 4000 outlets, possibly including Canberra’s Parliament House branch.

Coincidentally, Canberra’s decision this week to impose a carbon tax from next year is expected to make mail delivery costs more expensive for Australia Post – and, because it’s a monopoly, consumers.

 

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco

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