A super-site in inner-city South Melbourne, occupying a whole suburban block opposite the popular local market, has sold for $41 million to the Langer family's GLG Group.
That price is close to double the $22 million paid by its private owner Aviation Consolidated Holdings three years earlier and comes as developers push hard for positions outside the CBD.
The property covers 4641 square metres, across the road from South Melbourne market. It comprises 10 separate titles, bounded by Cecil, York, Northumberland and Market streets.
GLG Group has been in business for about 50 years, running a property development and investment platform.
The South Melbourne site's position opposite the busy market means there will be some potential constraints on development, but the bidders were undeterred.
"The interest from such a wide range of buyers resulted in a huge number of conforming tenders with a local developer outmuscling a range of institutional and overseas buyers to secure the exciting land parcel," said CBRE's Mark Wizel, who handled the property with colleagues Julian White, Lewis Tong and Bianca Butterworth.
Major local players such as Grocon and Cbus Property were expected to show interest in the site, along with offshore developers.
Just one property in the portfolio of commercial and retail properties is tenanted, delivering an income of about $22,000 monthly. The site is zoned commercial.
Recent South Melbourne site sales have all been at land rates of between $10,000 and $12,000 per square metre. The most recent sale was in May last year when a developer snapped up 9-17 Raglan Street, an 835 sq m site with a four-level office building, for $9.1 million.
In November 2015, a Chinese developer paid $30 million for a South Melbourne car park and office building at 15-33 Bank Street on a yield of about 3.9 per cent.
Earlier this year, five-time Melbourne Cup winner and BRW Rich Lister Lloyd Williams sold the nearby Southbank premises of his property development outfit Hudson Conway for $11 million to a mainland Chinese company, which has plans for a new hotel.
Trendy South Melbourne has been been busy with a host of medium-density apartment projects overtaking industrial sites in recent years.
Apartment projects now under construction are selling units on per sq m rates of between $9000 and $12,000.