Compact West Melbourne site with tower plan fetches $2.7m

The Spencer Street property was offered with plans but not a permit for a 17-storey hotel atop a three car basement – but any incoming owner could rework the approved shell for an office, student accommodation or traditional apartment building.

A small development site on a busy West Melbourne corner a block from Flagstaff Gardens has sold for $2.7 million.

Seven parties contested for 437-441 Spencer Street which was offered with plans, but not a permit, for a 17-storey, 88 suite hotel (artist’s impression, right).

The parcel is at the south west intersection of Dudley Street – three blocks north of La Trobe Street – the top tip of Melbourne’s CBD.

Queen Victoria Market is also in the vicinity.

Given the land’s Mixed Use zoning, any incoming owner could consider an alternative development scheme within the proposed structure height, like student accommodation or an office.

CB Commercial Bureau’s Gideon Marcus, who sold the site with Colliers International’s Matt Stagg, said that is exactly what the buyer intends to do.

Two double-storey buildings on the parcel will be rented out in the meantime.

“There’s no doubt that developers and investors saw a fantastic opportunity post COVID-19 on the edge of Melbourne’s CBD, but the result also reflected a confidence that we are slowly emerging from the downturn and the Melbourne property market retains sound investment credentials, Mr Marcus added.

Small block with lots of front

The agents said the purchasers were buoyed by the success of a number of high-profile residential projects in the area.

“This was undoubtedly one of the best city fringe offerings to hit the market recently in a precinct which has become a very desirable inner-city location with easy access to public transport, major arterial routes and all other essential amenities,” Mr Marcus said.

The West Melbourne holding has 12 metres of Spencer Street frontage and nearly twice that to Dudley – plus it abuts a rear laneway.

This allowed Elevil Plus to propose a structure which would allow natural light from three sides: its hotel plan contained a three level basement, ground floor reception centre and office, six rooms on levels one to 14 and four penthouse suites on the 15th, below a rooftop terrace.

Mr Marcus and Mr Stagg marketed 437-441 Spencer street via an expressions of interest campaign.

Also today we reported Netball Victoria sold its double-storey West Melbourne headquarters – about 350 metres away and on a 404 sqm site – for a speculated $4.8m.

Artist’s impressions of the redundant hotel.
The corner site property (above and bottom) is in an area seeing a wave of high density apartment construction.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of