Share market volatility, and the desire for listed property groups to have as little debt as possible, is believed to have driven ISPT’s decision to bail out of the Stonington Terraces project in Glenferrie Road.
With joint venture partner Hamton, ISPT only recently obtained a permit to develop a luxury townhouse estate around the heritage protected stables, which formed part of the once larger Stonington mansion estate.
The property was used by Deakin University as its Toorak campus until last year. It sold the site to the ISPT and Hamton for about $33 million in a controversial deal negotiated in late 2006.
The development consortium has since onsold the historic Stonington mansion as a private residence to art dealer Rod Menzies for $18 million, setting a new price record for a home in Melbourne.
The remaining 1.7 hectare parcel of land it carved for its Stonington Terrace project, is expected to fetch more than $50 million.
Hamton managing director Paul Hameister said it received several unsolicited offers for the substantial parcel of “blue ribbon” land, after it was granted a permit to build on the site.
He stressed construction of a $2 million display suite at the site is continuing, as is marketing for Stonington Terraces. He added that if interested parties aren’t prepared to pay the right price for the site, Hamton and ISPT will proceed with development plans.
An ISPT spokesperson failedto return our calls.
Profiting From Government?
Buy for $30 million one year, and sell for $80 million the next?
It wouldn’t be the first time developers have swooped in on government controlled sites, then onsold at a monstrous margin.
Sources recollect private investor Jason Yeap, who in 1997 paid the government $18 million for a development site at 209 Kingsway South Melbourne.
The day after settlement, Mr Yeap sold part of the site to residential developer Central Equity for the same price it paid the government, and sold the balance of the site – now an office building and BMW car dealership – to Multiplex for a price speculated to be $20 million.
Examples can be found in the outer suburbs too. In 2001, the Department of Defence sold a Greenvale site to developer Peet & Co for $16.5 million. When Peet rezoned the land, it found buyers prepared to pay $45 million.
The Stonington example however was much more controversial, as it included the mansion which was Australia’s governor’s residence between 1901 and 1932.
There was for a small period last year speculation the mansion would be converted into apartments.