Rezoning could create $50m goldmine for union
The Victorian branch of the Australian Education Union is creating itself a $50 million-plus real estate goldmine covering two substantial blocks on the banks of the Yarra River, in Abbotsford.
The union is seeking a rezoning allowing high-density apartment construction over its two sites: 126 Trenerry Crescent – a property it outmuscled developers to buy five years ago; and 112-124 Trenerry Crescent, next door.
Covering about 6600 square metres, the parcels overlook Dights Falls, in a gentrifying pocket of Melbourne’s inner east, where in recent years, hundreds of apartments have replaced former industrial sites.
The holding includes the 1927 Austral Silk and Cotton Mills building – a distinctive red brick four-storey factory with three groups of windows surmounted by a parapet.
The union land is proposed to be rezoned from commercial 2, to mixed use zone.
The location of the union’s buildings in Abbotsford. Photo: Supplied
In the gazetting application, to be decided by a panel early next year, the union also introduces a design and development overlay schedule, requesting the tallest proposed buildings be built toward the north-west corner of the site, near the Eastern Freeway wall.
The union said the application had been instigated by a desire to realise the significant potential of a large urban renewal site that is well connected to an array of infrastructure, shops and services.
“It allows for the delivery of housing to cater to future population increases and reduce the pressure on other residential areas to achieve state housing supply requirements.”
Rezoning the site to mixed use would enable both residential and commercial uses.
The AEU declined to comment about the application while it is being reviewed. In coming years, its board will need to decide whether to sell the site or co-develop, perhaps retaining a portion of any new complex for itself.
In the current market, agency sources speculate the land could trade for about $40 million. This would rise substantially – $10 million or more, according to sources – with permission for higher density, residential redevelopment.
The union paid $15.6 million for 126 Trenerry Crescent, an office on 2206 square metres, in 2011. It bought 112-124 Trenerry Crescent, which includes the historic factory and is on a 4401 square metre plot, for $8.5 million in 1998.
With more than 52,000 members, the Victorian union earns revenue leasing parts of the complex it does not occupy as offices.
Meanwhile, in the CBD, the Victorian branch of the Australian Nursing Federation recently launched a marketing campaign to sell its outgoing headquarters, two adjoining properties at 532 and 540 Elizabeth Street, worth a total of about $30 million. It bought new headquarters across the road in 2012.
Get a weekly roundup of the latest news from Commercial Real Estate, delivered straight to your inbox!
