Malaysian-backed developer Beulah International has emerged as the frontrunner to take over the BMW dealership site on the fringe of the Melbourne CBD.
A 6000-square-metre plot on the corner of Southbank Boulevard and City Road, the site raised expectations of $100 million or more when it hit the market in August.
The key to a successful offer will not be price alone, though, as the prestige German car maker wants to retain some kind of presence on the prime site.
A development deal may include as much as 1500 square metres allotted to BMW, through a lease or strata title, at the site of its home for the past decade.
Beulah, already a busy player in the Melbourne market, looks likely to pip other players in efforts to wrangle an agreement that will satisfy BMW’s requirements for the site, according to market sources.
The developer has a track record in securing complex development deals on tightly held city sites.
In September last year, Beulah ran the gauntlet of a volatile member base to lock in a $25.6 million development deal for the 140-year-old premises of the Celtic Club.
As part of that deal, the club has the option to buy back 2000 square metres of the Queen Street premises, including the ground and first floors, to establish a contemporary club.
That may well provide a model for BMW, whose chief executive in Australia Marc-Heinrich Werner has been adamant the luxury brand is not looking to simply offload the site at the highest price.
Rather, BMW will aim to incorporate a continuing presence on the site as part of its global response to challenges to the traditional car industry by transforming itself into a provider of what Mr Werner has termed “mobility services”.
Architects Fender Katsalidis have worked up a scheme of two towers joined by a sky-bridge, potentially comprising 800 apartments, 550 hotel rooms and 10,000 square metres of commercial space for the site.
With approaches from developers already coming in the door, BMW has appointed CBRE’s Mark Wizel, Josh Rutman, Julian White and Lewis Tong to broker the site.
The BMW strategy is a contrast to other brands, such as Mazda, Ford and most recently Toyota, which have given up their sprawling inner-city sites in Melbourne.
That exodus is a country-wide trend. In August, one of Brisbane’s best-known car dealerships, the Audi Centre and Euro Marque in Fortitude Valley, was listed for sale with expectations of $100 million or more.
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