Melbourne, 25 August 2015 - A prominent offshore group has fought off stiff competition to acquire three residential properties in one line on Camberwell’s sought after Burke Road.
Located at 585-589 Burke Road, the 2,787sqm development site was marketed through a highly competitive public Expression of Interest process attracting strong interest from both offshore developers and prominent local developers.
Selling agents Scott Orchard, Julian White, David Minty and Lewis Tong of CBRE Victorian Development Sites said the sale was the latest example of group selling, as neighbouring landowners increasing sought to club together to achieve sales premiums.
In this instance, the property was acquired by a locally based purchaser backed by offshore capital for $10,000,000 – representing a site price of over $3,500/sqm.
“Group selling is becoming increasingly popular with this sale providing one of the strongest results seen in Melbourne to date,” Mr Orchard said.
“While the final price has not been disclosed, it has reaped the landowners a financial premium more than 25% above what they could have achieved by selling their sites individually.”
Mr White said good quality inner suburban development sites with more liberal residential zonings were hotter than ever. This was particularly the case for sites in Melbourne’s affluent inner east which suited development projects involving less than 100 apartments.
"More and more offshore groups are attracted to blue-chip locations such as Hawthorn, Kew, Balwyn, Surrey Hills and Mont Albert due to the strong fundamentals supporting apartment development coupled with the stronger buyer interest from owner occupiers," Mr White said.
Mr Minty added that these suburbs offered high quality amenity, good access to public transport and world class secondary and tertiary education facilities. This was supporting strong housing demand and apartment sales rates leading to consistent capital growth, Mr Minty said.
One of the owners of 585-589 Burke Road, Tom Kenessey said; “We deliberated on the idea of group selling for some time. We weren’t sure that the opportunity to sell together would leverage our individual positions and if a premium was realistic. CBRE’s confidence in how to position the properties to achieve a greater net outcome and experience in preparing and handling technical aspects of the approach to market was instrumental in generating a sale price which was above our expectations.”
Mr Minty noted that the trend for group selling had gathered pace since the introduction of new municipality residential zonings limiting residential areas suitable for apartment development. Continued local and offshore developer confidence in the pre-sale apartment market was another driver as apartment sites become harder to secure and planning permits became more difficult to obtain.
“This has narrowed the gap between permitted and non-permitted site values given the current demand from local and offshore developers,” Mr Minty said.
The Camberwell deal follows a number of other group sales completed by CBRE this year including:
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.