Prolific Melbourne private developer Salta Properties has revealed detailed plans for two office buildings on a large Richmond site as the Reject Shop’s founder gets ready to sell a nearby Swan Street office.
Salta has submitted plans for two office buildings, one 14 storeys and the other seven, on a large Richmond site it purchased for $51 million last year.
They include 23,500 square metres of office space across two buildings that will house a large 1,322 sq m ground floor retail mall and a three storey childcare centre with a rooftop garden.
A 14-storey building will front onto a site at 459-471 Church Street while another interconnected structure behind will drop from seven to four storeys and extend to include 20-26 Brighton Street.
Existing low-rise buildings will be demolished to make way for the offices.
Former industrial suburbs like Richmond, Cremorne and Collingwood – once the focus of an apartment-led transformation – are now seeing developers’ attention turn to sleek new environmentally friendly offices to cater for Gen Y workers in creative and start-up industries.
The shift has made them one of the country’s most active office markets, with surging rents leading to a spike in development proposals and soaring land values.
Landlords have been quick to capitalise.
A two-level office at the eastern end of Swan Street is the latest to hit the market through agents Burgess Rawson and Gross Waddell with expectations around $25 million.
The property at 471-479 Swan Street and 10 Belgravia Street, owned by Reject Shop founder Ronald Hall, is fully leased to ASX-listed Pacific Star Network which also runs SEN radio from the premises. Mr Hall, who also founded retail outlet Going, Going, Gone, is a Pacific Star board member.
Pacific Star pays the land tax and rent of $470,000 per annum on a site that had significant potential development upside, Burgess’ Rick Silberman said.
Mr Silberman said investor demand for well located inner suburban offices was high.
But investors may have to recalibrate their expectations after a two-level, 1302 sq m office at 1 Oxley Road in Hawthorn set a new benchmark last week, selling for $15 million on a 3.2 per cent yield after a marathon 52 bids at auction.
Cremorne, Richmond and Collingwood account for the bulk of office space in Yarra Council’s planning pipeline, about 190,000 sq m.
Architecture firm CHT Architects recently announced it is seeking a permit for a $30 million 12-storey office bordering Abbotsford’s industrial precinct at 20-30 Mollison Street.
And Dodo founder-turned developer Larry Kestelman has plans to turn the old Moonlight Receptions ballroom in North Fitzroy into a $140 million, 10-storey office building.
Salta’s proposal is next to another large 1,320 sq m site at 475 Church Street, occupied by a low rise showroom, which has been on the market since March with expectations around $13 million.
Further along Church Street on the corner of Bridge Road, supermarket giant Coles has altered its development application above Coles Plaza to substantially increase the amount of office space, to 2,115 sq m, and reduce the amount of retail space by one third.
Coles also wants to reconfigure a large apartment project on the site, substantially lifting the number of two and three-bedroom apartments at the expense of one-bedroom units.
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Written by Simon Johanson, The Age