Bar and sex-on-premises venue Club 80 will be forced to relocate or close at the end of its tenancy – after the Collingwood buildings it has occupied for more than 20 years sold to an investor this week, within days of being advertised.
The next owner plans to replace the holdings with offices after paying c$8 million.
With the deal, an expressions of interest campaign which was set to close on November 20 has been cancelled.
The purchase includes:
- a triple storey art deco replica built in the 1980s at 8 Peel Street, with 247 square metres of internal area and a crossover, and
- a three-storey art deco brick warehouse with 1038 sqm at 10 Peel St, opposite the near-new Peel St Park.
When the Club 80 sites were listed, they carried a combined guide of c$7.5m – valuing the land at about $18,000 per sqm – a suburb watermark.
The actual result could price the land closer to $19,000 per sqm.
Marketing agents, Knight Frank’s Danny Clark, Andrew Hansen and Jack De Lutis with GrayJohnson’s Rory White, Matt Hoath and Brett Simpson, declined to comment.
Club 80 at 8 and 10 Peel Street will make way for offices
Covering 417 sqm, any incoming owner could have entertained a variety of new development outcomes at Peel St, including residential and a hotel.
Instead, the purchaser intends to refurbish the existing shell as an office.
Because a mezzanine will be ripped out, the lettable area will shrink to about 895 sqm.
Collingwood, with Richmond/Cremorne, East Melbourne and South Melbourne, command the highest commercial rents outside of the CBD and Southbank.
High character warehouse-converted-office space, like that now proposed for 8 and 10 Peel St, is the most sought after, with occupiers regularly known to pay more than $600 per sqm, per annum.
In April we reported that Sony Music was paying $500 per sqm/pa, for its new Melbourne office headquarters – a graffiti-covered former factory with bars on the window, opposite the Richmond train station (pictured, below).
Sex sells…increasingly in Melbourne to property developers
The Club 80 sites aren’t the first licensed for sex to recently pique the interest of developers.
In 2017 Crema Group paid c$15m for the South Melbourne building which for 30 years accommodated The Pink Palace brothel.
That site, 8-16 Palmerston Crescent, is now mooted for an 18-storey apartment tower, The Eighth.
Three years ago, private developer Tony Huang paid $12.66m for Elsternwick parlour The Daily Planet – and two neighbouring buildings – a deal which valued the land at $10,200 per sqm, reportedly a suburb record.
Former city sauna Steamworks at 279-291 La Trobe St, which closed in 2008, was later acquired by the Coptic Orthodox Church and recently rebuilt as Eporo Tower, a cathedral with upper level apartments.
In September we reported that the operator of nightclub Lounge, which closed at 243 Swanston St after 29 years, rented Carlton’s former Hellfire Club S&M venue with plans for a 24-hour hospitality venture (story continues below).
Longer term it is expected the airspace of this Queensberry St address will also be replaced.
Collingwood blue collar continuing to make way for white
Two months ago, Pace Development Group listed for sale a compact 11-level office under construction on a 510 sqm block, formerly occupied by a factory, at 51 Langridge St.
Just prior, we reported about a warehouse-converted-office with development upside at 4-12 Langridge St trading for $3.5m, pricing every square metre of the Commercial 1 zoned land at $9500.
Speaker and director of apartment builder Domain Hill Property Group, Peter Cahill, has been recently selling down adjoining Collingwood industrial sites as residential development plays, banking more than $20m, according to sources.
Earlier this month, the developer offloaded sites known as 60 and 70 Rokeby St following another campaign also targeting builders.
Four months ago, design house Bar Studio outmuscled investors for a red brick warehouse at 47 Easey St part-occupied for 20 years by alternative radio station PBS.
Bar Studio plans to owner-occupy that double-storey Collingwood building, which cost $6.85m.
In 2017, the suburb residential record was set when a church-converted residence at 6 Oxford St traded for $6.1m.
Like many Melbourne suburbs, Collingwood will soon be distinguished by a skyline of mid-rise buildings.
The Liberman family backed Impact Investment Group is developing a 12-storey office in the area: The Northumberland at 54 Wellington St, will be worth $111m upon completion. Cosmetics giant AESOP will occupy three floors of the 15,109 sqm complex.
Tim Gurner has a couple of active projects in the suburb: a unique, rectangle site at 1-57 Wellington St is earmarked for a series of mid-rise apartment buildings, the highest about 11 floors.
Mr Gurner is also constructing a 12-level mixed-use project at 23-33 Johnston St – in May committing Sydney-based Veriu to occupy a 95-key hotel component.
In April, US-based Hines paid Manfax Hardware and Paint owner Robert Larsson $28.5m for a 2120 sqm site covering 36-52 Wellington St.
That purchaser plans to replace it with Australia’s first timber tower – the height of which is yet unknown (while Mr Larsson went on to buy an unrenovated Collingwood office, 22-24 Northumberland Rd, off market, for $7.35m).
Last year, Zhang Weian’s V-Land paid $40m for the former Glo-Weave Shirt factory on 4287 sqm at 128-144 Wellington St, a site expected also expected to be replaced.
Peregrine Projects is also in the pocket: with an eight storey office proposal at 64-88 Langridge St.
That developer offloaded a neighbouring parcel (60-62 Langridge St) to Sydney-based Tribe Hotel Group which is planning a flagship guesthouse.