Zagame family pays AEU $21 million for prime Abbotsford site

Several sites on the banks of the Yarra River in Abbotsford, including this property in Grosvenor Street, have traded recently.

The Zagame family has paid $21 million for a prime Mixed Use zoned development site on the banks of the Yarra River in Melbourne’s inner north-east.

The 4735 square metre holding at 112-124 Trenerry Crescent, Abbotsford (pictured, top), was listed by the Australian Education Union’s Victorian division in October.

Overlooking Dights Falls to the east, and Victoria Park to the west, the property includes a four-level red-brick building containing 4252 sqm of office area – part of which was occupied as the AEU’s HQ until recent years.

In 2017 the union successfully applied to have the land rezoned to allow for the construction of apartments on the site, which was formerly only permitted for commercial use.

Fitzroys agents Paul Burns and James Lockwood marketed 112-124 Trenerry Crescent for the AEU which paid $8.5 million for it in 1998.

Mr Burns said 15 offers were received from a mix of local an offshore bidders, predominantly developers. Some potential office owner-occupiers also showed an interest.

“Bidders had schemes for a mix of office and residential uses for the property, looking to take advantage of the property’s recent rezoning to Mixed Use,” he added.

The existing warehouse on the site – built in 1927 and known as the Austral Silk and Cotton Mills building – will be retained by the incoming owners, Mr Burns said.

The red-brick Austral Silk and Cotton Mills warehouse, built in 1927, will be retained.

“Office vacancies across Melbourne’s city fringe have been tightening to historic lows and businesses are increasingly looking to Abbotsford as the next hotspot for commercial activity” Mr Burns said.

In mid-2017, Charlie Buxton’s Cadence Property Group paid $10.5 million for a former Spotless Cleaning warehouse at nearby 18 Victoria Crescent. This site is now the subject of an office redevelopment proposal.

Last September, members of the wealthy Holckner family banked a reported $40 million selling a low-rise office park on a 5927 sqm block at 64-78 Trenerry Crescent, which like #112, has direct Yarra River frontage.

Owner occupier Thorne Harbour Health recently paid the founders of United Petroleum $11 million for a historic former shoe factory at 200 Hoddle Street, Abbotsford.

In October, developer Peregrine Projects banked a reported $10 million selling the Carlton & United Brewhouse at 11-17 South Audley Street, Abbotsford – a site targeted to office builders as well as investors.

In the same month, private investors Lazcorp Group and members of the Herzog family sold an office investment and open air car park, covering the addresses 45 and 50 Grosvenor Street, Abbotsford, to a Chinese buyer for $37.3 million.

The AEU is based at 126 Trenerry Crescent – next door to the site it has just offloaded – a property it acquired for $15.6 million in 2011, and also had rezoned to Mixed Use recently.

Four months ago we reported the Zagame family’s Zagame Corporation was selling a portfolio of five Victorian pubs to New York based investment bank Moelis for $271 million.

Marc Pallisco

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

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