The development site, which vendor St Hillier’s purchased off Channel 7 in September 2003 for around $7.5 million, was sold with a permit for a high-rise, 250-unit apartment tower.
The disused studio is only a few streets away from the Kingsway Motel developer Central Equity purchased for $6.25 million, in May – suggesting residential developers have faith the South Melbourne market has recovered from oversupply pressures it faced earlier this decade.
Unfortunately for Channel 7, it sold its South Melbourne site during the peak of this oversupply period for a price which would today be considered a steal.
The Wells Street property was the fifth and final asset sold from its St Hilliers Enhanced Property Fund No 1. Along with other assets in Sydney and Canberra, the fund is believed to have returned more than $65 million for its investors.
The fund strategy involved investing in tenanted properties to provide an immediate income stream, while creating development and value-add opportunities, such as obtaining permits.
St Hilliers general manager funds management, Nicholas Ridgwell, said the unlisted property Fund would deliver a pre-tax return of approximately 20 per cent per annum on investors funds after fund fees and expenses other than performance fees.
Coincidentally, a decision about the sale of television rival Channel Nine’s outgoing Melbourne and Sydney studios is imminent.
A consortium led by R.Corporation, and including Sydney-based fund manager Charter Hall, is expected to be announced as the buyer of the network’s 3-hectare Bendigo Street studio, for a price speculated to be more than $85 million.
Charter Hall is also expected to pick up the network’s Willoughby studios in Sydney for about $120 million.