“This record-breaking sale price for a city site is a great vote of confidence in the Melbourne property market,” said mayor Robert Doyle in comments carried by the Australian Financial Review. “Our reputation as the world’s most livable city is contributing to this strong demand for prime Melbourne real estate.”
Telstra carved out the site, along Exhibition and La Trobe streets, from a larger A$800 million tower project site which it abandoned. Telstra, advised by Charter Keck Cramer, appointed CBRE’s Mark Wizel, Mark Granter, Jose Rutman and Lewis Tong to manage the property deal. “The sale bodes incredibly well for Melbourne as a city and Australia as a destination for foreign investment,” said Wizel.
“This is a golden opportunity for SP Setia to deliver another development par excellence in Melbourne, the world’s most livable city for the fifth year in a row,” said SP Setia in a statement.
Amidst concerns of an oversupply, it added that detailed planning was underway for re-development of the site into two residential towers, each with 800 residential units above a retail podium space, at a cost of A$640 million. The site overlooks the leafy Carlton Gardens.
The deal is the first of its kind since the state government came in with strict new rules in the CBD for planning permission. Offshore buyers face higher stamp duties and restrictions on lending to foreign purchasers.
SP Setia controls two other high-rise residential properties in central Melbourne and two smaller suburban sites.