Metier3 Buys CR Kennedy Site, South Yarra, Melbourne

It’s expected Metier3 will develop a $200 million-plus village with offices, apartments and a shopping centre at its new 661 – 669 Chapel Street site. The property is currently configured as a low rise, rendered office warehouse and occupied by photographic distributor CR Kennedy, which was also the vendor. CBRE was the selling agency.

Any redevelopment will better exploit the site’s massive 65 metre frontage to Chapel Street, which commands the highest retail rents outside of the CBD.

The speculated sale price, which equates to $7068 per square metre of land, is bad news for other developers trying to offload major South Yarra development sites.

Sydney-based developer Stockland is likely to be re-assessing the value of its 2 – 4 Yarra Street development site, nearby. Purchased for $26.25 million in April 2008 (during the economic downturn), Stockland listed the site for sale a year later – after a major change in strategy saw it focus less on apartments, and more on low density suburban housing.

Stockland’s 2146 square metre block, which is advantaged by having a permit (for a 27-level, 332 unit complex), is now speculated to be worth less than $20 million, according to sources.

The Deague family is also trying to sell a 3037 square metre South Yarra site at 4 – 10 Daly Street. This site has a permit for a 13-level hotel, but the family’s development company, Asian Pacific Building Corporation, has abandoned its original plans to redevelop.

Coincidentally, both these developers have cases pending with the Victorian Civil and Administrative Tribunal to substantially boost the height of these proposals – Stockland’s to 35 levels, and APBC’s site, to 18 floors.

South Yarra’s biggest recent major sale occurred in August when private investment group Zig Inge paid nearly $18 million for an office at 199 Toorak Road. A neighbouring 908 square metre potential development site, in Claremont Street, was offloaded by the same vendor and fetched $6.5 million.

Metier was a minority shareholder in a Docklands building that recently sold for $240 million.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco

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