PrimeLand Group with Singaporean fund Baksh Capital has paid $9 million for East Melbourne’s Magnolia Court with intentions to renovate and extend it.
The guesthouse at 95-101 Powlett Street wasn’t for sale six months ago however, with hospitality one of the hardest hit sectors in the early stages of the COVID-19 pandemic, vendor Leaper Holdings offered the operator an option to pay a reduced rent or break the lease, for which it chose the latter.
Teska Carson’s Luke Bisset then campaigned it off-market.
PrimeLand chairman Robert Brij said “the site provides us an opportunity to not just embrace East Melbourne’s history, but put it on display to the world.”
“The character and personality of Magnolia Court is incomparable, we hope to breathe some life into the hotel and restore it to its full potential.
“Its humbling to be part of such an important piece of the area’s history”.
The purchaser is behind other Melbourne boutique accommodation and is presently proposing a Holiday Inn at 471-479 Swan St and 10 Belgravia St, Richmond, as part of a joint venture with Diamond Hospitality Singapore and Pelligra Group (the latter a local developer with which it is also constructing the Olivia Brighton apartment complex and Lionsgate Business Park).
Constructed in 1861 as Miss Ainslie’s School for Young Ladies – which shortly after moved elsewhere in the suburb and became known as Ormiston Hall – 95-101 Powlett St was first noted as a hotel 138 years ago.
It was extended in 1888, according to the East Melbourne Historical Society, before becoming the Kelvin Mansions apartment complex then in 1956 selling to the Presbyterian Church which added a three level annex to its southern boundary.
It traded again in 1985, then in 2012 to Leaper, for $4.6m (story continues below).
PrimeLand intends to renovate the existing 26 suites and build another 15-20 rooms on an undeveloped piece of the 920 square metre parcel, less than a kilometre east of the city and walking distance to the MCG, Melbourne Park and commercial strips in Abbotsford, Collingwood, Fitzroy and Richmond.
“The purchaser saw an exceptional opportunity to add significant value,” Mr Bisset said.
As part of the redevelopment, historic elements inside and out will be enhanced.
A ground floor restaurant will also be refurbished.
Baksh Capital managing director Birbal Singh Bajaj said “we are focussed on expanding our footprint in the region by investing in under-performing assets that demonstrate value-add potential.”
“We are particularly excited for this historic asset which has received strong interest from leading co-living operators and hospitality management groups”.
The deal comes two months after another developer paid $6.45m for the historic low-rise East Melbourne property, Eblana, at 140-142 Jolimont St.
In May, Sydney-based Luxcon Developments unveiled plans for a luxury apartment project at 372-280 Albert St, also in the suburb.
At the start of the year, Queensland builder Pask spent $22m on the historic College House, occupying a 1533 sqm holding at 254-260 Albert St, reportedly also with the intention of a residential redevelopment.