Four neighbouring terrace homes, wedged between commercial buildings in Stephenson Street, in the Richmond pocket known as Cremorne, sold for $7.1 million on Friday.
On a near-550 square metre block zoned Commercial 2, the properties (pictured top, left and bottom) were marketed as a development play by Colliers International’s Andrew Ryan, Ben Baines and Ted Dwyer.
Also with frontage to Gwynne Street, the brokers said the site could make way for a commercial development over multiple levels.
The sale price of 102-106 Stephenson Street equates to a land rate of about $13,000 per sqm.
Richmond office rents have ballooned in recent years – with leasing agents saying deals are “regularly” signed for a return of more than $500 per square metre, per annum – amongst the highest outside of the Melbourne CBD.
Earlier this year, business software giant MYOB announced it committed to 8800 sqm of space at 17-21 Harcourt Parade, Cremorne – part of Caydon Property Group’s The Malt District, proposed for the site of the Nylex clock.
MYOB has additionally leased 5250 sqm within another two buildings in the area. It is set to become the biggest occupier in the region once its new building is completed in 2020.
Last year, Zig Inge Group announced it would build a seven-level office at 57-61 Balmain Street, Cremorne – filling the airspace of a former Rosella sauce factory. Shortly after, plumbing industry supplier Reece committed to part of this proposed 7500 sqm complex.
Vinci Carbone director Frank Vinci said that the gentrification of the inner suburbs brought on as a result of the large number of residential developments has also opened up these areas to be attractive as office locations.
“The inner-city areas of Richmond, Cremorne and Abbotsford have become populated with cafes, bars and restaurants as well as general services such as mini-supermarkets, gymnasiums, medical and childcare centres etc which provide amenity for local residents and workers,” Mr Vinci said.
The agency is marketing a 2291 sqm Abbotsford parcel nearby at 11-17 South Audley Street (pictured, left), currently occupied as the Carlton Brewhouse, which was built in 1997. The campaign is targeting developers which might consider demolishing the 1035 single-level complex to replace with a multi-storey office.
Mr Vinci said that the site opposite, of similar land size, is already earmarked for a circa 7,000 sqm office, which once built will have an “enormously positive” effect on the local area.
Abbotsford has the potential to become another Cremorne given that it has just as much amenity including shopping facilities and access to public transport. Abbotsford is also adjacent to the suburbs of Kew and Hawthorn providing a solid source of white collar workers, the broker said.
“In terms of land values Abbotsford is probably where Cremorne was sitting two-to three years ago at $4,000 to $5,000 psm,” Mr Vinci said.
“Today, values in Cremorne for commercial type sites have hit $13,000 psm on more than one occasion. There have also been a number of sales in other adjacent areas such as Collingwood at over $10,000 psm, reinforcing the view that Abbotsford is probably one of the best inner-city areas for value, at present”.