Increase in building activity in Melbourne

Melbourne building activityAs the movement to build residential apartment towers in Melbourne gains even more momentum, another property has traded as a residential development site. The properties at 256-260 City Road, Southbank reportedly changed hands last week for $27 million in a deal arranged by Lemon Baxter of Melbourne. The vendor was Apex Vic Pty Ltd, privately owned by Jamie Lu, Tang Xiong Lu and Ling Qian Huang, all of Balwyn, Victoria. Apex Vic purchased the site in 2 parcels for a total of just over $4.5 million between 2008 and 2011. The site already has an approved development application for a 61 storey tower comprising of 431 residential units and retail on the ground floor. This probably accounts for its dramatic $22.5 million rise in just 4 years.

As Melbourne prepares to face a major overhaul of planning controls in the CBD and Southbank, having current and approved development applications (DAs) certainly adds value to a property. Victorian Planning Minister, Richard Wynne, said there had been a “massive appetite” for city apartments without any corresponding planning emphasis on controls for amenity and density. Interim controls, including height limits and stricter site plot ratios, will be imposed until the planning review is complete.

The increased difficulty in gaining approval does not seem to have had any effect on those applying for DAs. Southbank Cityscope has noted several new DAs lodged in the last few months, including:

  • 85-87 City Road for the construction of a 67 storey mixed use development comprising of 782 residential dwellings and a ground floor commercial/retail space
  • 202-214 Normanby Road for the construction of a 40 level building consisting of 284 residential apartments and ground floor retail
  • 131 Sturt Street for the construction of a multi-storey building comprising of 341 apartments and a podium level retail and commercial tenancies.

With many other similar DAs already approved or still going through the application process, it’s easy to see the future of Southbank and other inner city suburbs evolving “from an industrial wasteland to the densest suburb in Melbourne”, the Minister said. With an estimated 5,500 new apartments to be built just next year alone, it’s a future that’s already here.

 

Meredith Baume
Commercial Research


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About Commercial Research

CoreLogic RP Data Commercial Cityscope is a web-based service. Access is sold by geographic regions (Cityscope areas). There are 25 geographic regions across Australia (three in New Zealand), clustered around the cities of Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra and Newcastle. Darwin and Hobart CBD centres aren’t covered. Cityscope Areas in NSW and QLD also include lease expiry data for the most complete commercial coverage available. For more information call 1300 734 318.

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