Tea House Building, Southbank, Sells. Boutique Hotel Proposed.

Sources say the private investor syndicate will pay more than $15 million for the 126-year-old Tea House building at 28 Clarendon Street in Southbank, next to the Melbourne Convention and Exhibition Centre and opposite a major entrance to the Crown Casino Entertainment Complex.

Boutique developer David Deague and Singapore-based Ascott Group are believed to have contested for the property, which is widely tipped to be redeveloped into a boutique hotel with groundfloor retail.

CB Richard Ellis executives Jay Rowlings and Mark Wizel marketed the Tea House, which was expected to sell for about $10 million. Both agents confirmed the property is in exclusive negotiations with a buyer, but declined to comment further on any part of the deal.

Given the site’s prominent location and heritageprotected status, apartment and office developers are always going to struggle to snare it from an hotelier, sources say.

The State Government put the sixlevel building of 3192 square metres on the market last month. Former premier Joan Kirner bought the building – on a 2948 sq m block – in 1991 for $4.2 million with the intention of turning it into part of a larger museum hub. The site was retained as offices in the economic turmoil that followed.

The building was used as a tea house until 1950.

The Ascott Group recently paid $136 million for an unbuilt serviced apartment building at 131-135 Bourke Street. That site is being developed by the Queensland-based Devine Limited, which paid $18 million for it last year.

 

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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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