Developers pounce as big CBD companies turn to city fringe officesThe 3538 square metre block was owned by Blazer Clothing founder Peter Murray.

Developers pounce as big CBD companies turn to city fringe offices

Developer Bill McNee is taking advantage of big-city companies’ newfound willingness to sign leases in trendy city-fringe locations, swooping on a prime Melbourne development site for $53.5 million.

The near one-acre site at 31-53 Cremorne Street, Cremorne has no development permit but could hold a new 10-level office if Mr McNee’s Vicland Property Group opts to chase a planning permit.

The property, transacted through Teska Carson’s Matthew Feld and Luke Bisset, has several leases with termination clauses and provides a holding income of $1.3 million.

With two street frontages, the 3538 square metre block was owned by Blazer Clothing founder Peter Murray.

Mr Murray amassed the site after adding a final piece from the Schwartz family when he paid more than $10 million for a 761 square metre portion at 33 Cremorne Street in 2017.

Cremorne, a tiny inner fringe suburb stacked with old brick warehouses and fresh new offices, has become a magnet for technology and creative companies, reflecting a decade-long shift that is being amplified by the pandemic as companies look to relocate out of the city centre.

Other landholders in the area are also cashing in. Former Porsche dealer Alan Hamilton is selling part of the historic Bryant & May match factory, a supersized development site in Church Street.

It’s one of the largest single land holdings on Melbourne’s city fringe with a 9715 square metre complex that includes portions of the heritage-listed red-brick factory, notably the former dining hall, chimney stack, boiler room and an ornate two-storey structure facing Church Street.

ASX-listed Irongate is also believed to be close to settling on a half stake in Alfasi’s new 10-storey office tower at 510 Church Street for about $125 million.

Another once run-down industrial suburb, South Melbourne, is also attracting investor attention. Two months ago, ASX-listed Centuria Office REIT pounced on an office at 101 Moray Street developed by the wealthy Deague family for $205 million.

Mr McNee also recently tested city fringe investors, offering for sale a newly developed and fully leased nine-level tower at 11 Wilson Street in South Yarra.

That 6300 sq m building transacted to German fund manager Real I.S for $75 million on a 4.5 per cent yield, with Vicland retaining a lease over the top floor for its Melbourne headquarters.

The developer is also pushing ahead after gaining a permit at 489-505 Toorak Road for a $300 million luxury office and retail project known as St Germain.

Vicland’s Jake Steinhart said the group was buoyed by its Toorak project which is proving popular with businesses relocating from the city.

Keep up with Commercial Real Estate news.

Check out our Privacy Policy.