Site with development upside in Melbourne’s Richmond sells for $8.7 million

The land this building occupies is valued at $11,560 per square metre.

An investment with development potential in the precinct described as Melbourne’s Silicon Valley sold at auction yesterday for $8.66 million – or $11,560 per square metre of land.

The 749 square metre parcel at 11-15 Albert Street – which is accessed off Church Street – is understood to have sold to a local buyer who will landbank it.

It was offloaded by a private investor who has held it for more than 20 years.

Pana Chocolate and a gymnasium occupy a double-storey 1132 sqm brick building on the site (pictured top and left), paying close to $147,000 per annum in rent.

A gym, and Pana Chocolate, occupy the property at present.

On that basis, 11-15 Albert Street is trading on a very low 1.7 per cent passing yield.

Teska Carson directors Matthew Feld and Michael Ludski marketed the site. Coincidentally, this agency’s office is only a couple of hundred metres away at 516 Church Street.

Mr Feld said the campaign attracted a mix of prospective buyers including owner-occupiers, investors and developers.

The site has three street frontages and “substantial rental upside” the broker added.

Office rents in the area are known to surpass $500 per square metre, per annum, making Richmond one of the most valuable workplaces outside of the CBD and Southbank.

Major occupiers in the area include REA Group at 511 Church Street, a modern five-storey building which replaced a furniture showroom.

Red Energy, Uber and Tesla Motors are also in the pocket.

By February 2020, it is expected software company MYOB will be the area’s biggest occupier. After recently leasing about 5250 square metres of space within two offices, in Punt Road and Stephenson Street, the company announced it would relocate the rest of its staff from Glen Waverley to a new nine-level 9600 sqm building under construction at 17-21 Harcourt Parade, Cremorne.

Last year, Zig Inge Group unveiled plans to build a seven-storey, 7500 sqm office on airspace of a former Rosella factory at 57-61 Balmain Street. Soon after announcing the project, it secured Reece Plumbing as a part-occupier.

Last month we reported that local developer CostaFox had applied to build an eight-storey, 5464 sqm strata office complex at 1-11 Gordon Street, Cremorne.

CostaFox paid Icon Developments $12 million for this 1180 sqm holding earlier this year following an off-market campaign. Icon acquired the property in two parts – in January 2016 it bought the larger property, a red brick warehouse. In March 2017 it snapped up a neighbouring house.

In early September, a developer paid $7.1 million for four adjoining terrace homes on a combined 546 sqm block.

Six weeks ago, China-based investor Hong Se International $14.8 million for a showroom with redevelopment potential on a 1658 sqm block at 485-497 Bridge Road, Richmond. Two weeks later it paid $9.9 million for another low-rise commercial site on a 1381 sqm holding, 157-161 Burnley Street, nearby.

An aerial image showing 11-15 Albert Street (shaded) in relation to Church Street, Richmond, and the Melbourne CBD.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of