Bill McNee’s Vicland Property Group has started constructing a major South Yarra office on a speculative basis.
The nine-level, 6295 square metre building at 11-13 Wilson Street (artist’s impression, top) is due for completion late next year.
The end value is estimated to be $100 million.
Mr McNee is developing it without bank funding.
Colliers and CBRE are the leasing agents.
The move to build speculatively gives Vicland the chance to guarantee prospective clients when an office will be ready; many other proposed projects are at ‘pre-commitment’ stage with no start date.
As we reported in April, the size of South Yarra’s office market is forecast to almost double by 2023.
The 1125 sqm holding previously accommodated a three-storey car park (story continues below).
Outside of the Melbourne CBD, South Yarra, along with South Melbourne and Cremorne, command the city’s highest average office rents – premium product speculated by agents to exceed $650 per square metre, per annum.
Vicland development manager, Jake Steinhart said while Cremorne has been receiving attention as a boutique employment precinct, South Yarra has the same drivers, including a shortage of supply, and pent-up demand.
“South Yarra and in particular Wilson Street benefits from having access to a high-quality demographic of professionals, better-to-none amenity and public transport which includes two train stations as well as trams and buses”.
The commercial building is Vicland’s second in the suburb – last October, plans were revealed for a project opposite South Yarra train station.
Newmark Capital acquired 11-13 Wilson St when it paid $165 million for the Jam Factory shopping centre in 2016.
In the immediate area, Spotlight Property Group has mooted a 10-level guesthouse to be managed by Starwood Hotels & Resorts as an Aloft, at 402-416 Chapel St.
An eight-storey residential building is proposed for 430-438 Chapel St – a site for decades known as the Chapel Street Huts.
This site’s co-owners, Franze Developments and Sampiere Group, paid $11m for the c800 square metre site making way for that project following a 2017 off-market negotiation with the Penprazes family, which had held it five decades.
Goldfields is proposing a 24-level office at 627 Chapel St, South Yarra.