A group of 20 unit owners in a Melbourne city fringe apartment block have banded together in the hopes of securing around $25 million for the building as a development site.
The four-block property known as Coventry Square at 77 Coventry Street stands on a 1483 square metre site close to South Melbourne market and the Royal Botanic Gardens in an area awash with high-rise towers and new apartment developments.
A result around the $25 million mark would generate a significantly better return to investors and owners compared with if they sold their apartments individually. Recent sales in the building have been around $630,000 for a two-bedroom apartment. Coventry Square comprises 12 two-bedroom apartments and eight three-bedroom apartments with the proceeds to be divided based on council rates.
The strategy of owners joining up their properties to sell them in one line has yielded a number of impressive results in Sydney, where new strata rules require all owners to sell in a building if 75 per cent or more agree.
In Melbourne, collective sales are also occurring but are harder to achieve as they require approval from 100 per cent of owners.
The opportunity at Coventry Square was put together by Christian Ranieri and Ed Wright of RPM Real Estate Group. Mr Wright said the site was attracting interest as a possible hotel development given its close proximity to the Southbank arts precinct.
“It’s an extremely rare opportunity to acquire a substantial income-producing residential asset with enormous upside potential,” he said.
“Future redevelopment of the site could encompass not only a residential development but boutique hotel, office or commercial development which are extremely attractive in the current market.”
In the short term, the building will generate rental income for the new owner with two-bedroom apartments renting for $500-530 per week and three-bedders at $630-660 per week.
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