The landmark Festival Hall – Melbourne’s eighth largest live entertainment venue ranked by capacity – is quietly being marketed for sale.
It is the first time in more than a century that the high-profile block (pictured, above and below) has been offered.
Included in the deal is the multi-purpose arena at 300 Dudley Street developed in 1955 after a fire destroyed a c1913 complex built by Sydney boxing promoter R L Baker simply known as West Melbourne Stadium.
The Wren and Lean family’s Stadiums Limited acquired the complex in about 1915.
For sale with Festival Hall are two neighbouring West Melbourne office/warehouses: 3/119 Adderley Street (on a 536 sqm site) and 288 Rosslyn Street (449 sqm).
Colliers International’s City Sales’ Matt Stagg confirmed he is closing an off-market expressions of interest campaign for the portfolio next week.
Mr Stagg said Festival Hall is likely to face two futures:
- continued operation as a live entertainment venue, and/or
- a major urban renewal project redevelopment.
A sale price of about $30 million is being quoted for Festival Hall.
The two warehouses may be purchased separately or as part of the portfolio and are being quoted at $4 million each.
Festival Hall and Melbourne
Festival Hall accommodated gymnastics and wrestling events during the 1956 Melbourne Olympic Games.
Later known as the House of Rock and Roll, the venue also hosted The Beatles, Johnny Cash, Bill Haley, Frank Sinatra and Shirley Bassey.
More recently, the Red Hot Chili Peppers, Justin Timberlake, The Foo Fighters, Ed Sheeran and Lorde have performed there.
Festival Hall accommodates sporting and cultural functions too.
The venue has events booked well into next year.
For Sale sign hangs for the first time in more than a century – as West Melbourne reinvents
The 3460 sqm stadium occupies a 4135 sqm plot adjacent to Digital Harbour (which is part of Docklands), walking distance to Southern Cross train station, in a pocket of the city which has seen a wave of new construction since 2000.
Festival Hall is less than 500 metres from MAB’s Newquay, Marvel Stadium and Victoria Harbour – all places Melburnians wouldn’t have frequented 30 years ago.
Opposite 3/119 Adderley Street, Trenerry Property Group is replacing a former Australia Post depot with a $345 mixed-use project, West End, containing five towers of between eight and 13 storeys, 99 serviced apartments and about 4000 sqm of retail – coincidentally, which agents started marketing for lease this week.
Deague Group recently completed a 22 and 28 level building as part of its Melbourne Village project, at 377 Spencer Street, West Melbourne.
Private developers Bill McNee, via Vicland Property Group, and Tim Gurner, with his eponymous construction company, have in recent years completed apartment projects in the suburb, too.
Festival Hall as an Urban Renewal Precinct
Early last year, an application by the current ownership group to demolish the stadium and replace it with apartment towers was unveiled but ultimately rejected by planning authorities.
Mr Stagg confirmed Colliers is currently structuring a transaction that may unlock valuable air-rights and underutilised neighbouring land, potentially enabling the continued operation of Festival Hall with a complimentary and economically viable precinct revitalisation.
Structured joint ventures between private and institutional real estate investors (which would refurbish and re position Festival Hall), and operators from within the education, entertainment, hospitality, government, media and retail sectors, are also being formulated, Mr Stagg said.
Other specific user groups are also considering the outright purchase of Festival Hall for owner-occupation, the agent added.
…and gateway to Docklands and E-Gate
Festival Hall lies at a south west tip of a precinct covered (highlighted in image, right) by planning guidelines within the West Melbourne Structure Plan, which was endorsed by the City of Melbourne last year.
Importantly, 300 Dudley Street abuts both Docklands – and the area known as E-Gate: 20 hectares of rail yard land which government planners have in recent years earmarked for a high-density village with residences, workplaces and community spaces.
West Melbourne and a nearby pocket known in planning documents as Arden-Macaulay (also marked in image, right), are set to accommodate thousands of apartments – and tens of thousands of residents over the next 10 to 15 years.
Arden will also include an underground train station to be known as North Melbourne, part of the $11 billion Metro Rail initiative, connecting the region to South Yarra via the city’s university precinct, the CBD and Domain precinct, near the Shrine of Remembrance.
In what is called full mode – where ground floor patrons are standing – Festival Hall can hold 5400 people.
As an entirely-seated venue, this number drops to about 4500. Events for as low as 2200 patrons can also be accommodated.
These numbers rank the complex Melbourne’s eighth biggest based on capacity – between Margaret Court at Melbourne Park and St Kilda’s Palais Theatre.
Festival Hall is also the largest privately-owned venue in the city (though, interestingly, it has been speculated to realestatesource.com.au that the state government could be a suitor to buy it for educational use).
The value of the improvements
It would be extremely difficult to develop a new venue the size of Festival Hall in Melbourne because of the scarcity of sites, town planning challenges and building expenses.
According to a 2017 KPMG Stadium Ownership Report, the average construction cost for an Australian stadium seat over the past 10 years is $10,000.
The most recent comparable, newly constructed venue in Australia to Festival Hall is Fortitude Music Hall in Brisbane: this c3500-capacity complex cost $43 million to build inclusive of land, pricing each seat at $12,285.
Festival Hall contains 12 seating sections – including a VIP seating area and “fan meet and greet” space.
It is accessed by 46 doors – along Dudley and Rosslyn streets and Wren Lane. There are 11 bars, four merchant stalls, 12 bathrooms, two dressing rooms, communal lounge, and administrative offices.