Private developer Grocon has reaped about $60 million from the sale of two development lots at the former Carlton & United Breweries site in the inner Melbourne suburb of Carlton.
A private development company from mainland China snapped up the parcels for a major apartment development and will now develop about one-third of the 2ha $1.2 billion urban renewal precinct.
The deal came as former Macquarie Group banker and head of property Bill Moss warned that any moves by regulators would do little to stem the wave of offshore buyers.
“We have a free-floating dollar, equity makers are global and now our residential markets are going the same way,” Mr Moss told The Australian.
CBRE Melbourne City Sales agents Mark Wizel, Josh Rutman and Tom Tuxworth brokered the sale.
Mr Wizel said the appetite for both Melbourne CBD and suburban development sites, including those on the CBD fringe, was stronger than it had ever been.
“The smart ones in the industry have decided that instead of trying to work out when the music will stop they would prefer to work out how to dance with Asian capital, rather than resent it,” Mr Wizel said.
Both parcels were sold without permits but were chased by Australian, Singaporean and Malaysian developers due to their prime positions near RMIT and Melbourne University.
Developers are increasingly targeting sites without permits in Melbourne in the belief their high-rise plans will win state government support.
Grocon general manager for business development Dan McLennan noted the success of the campaign and said the company would pour the proceeds into its record Australia-wide development pipeline.
The Daniel Grollo-owned company has been selling down its exposure the precinct over the past two years as it rebalances away from Melbourne apartment projects and takes on broader national works, such as the Commonwealth Games village on the Gold Coast of Queensland.
In the CUB precinct, the company will finish its $290m mixed-use Swanston Square development, with 536 units, in the first half of next year.
The group’s next project in the area, the $110m Bouverie Street Apartments which will have 225 units, secured Japanese finance powerhouse Sumitomo Mitsui and Carol Schwartz’s Qualitas as project backers earlier this year.
In an indication of how much values have risen in sector, Grocon bought the entire CUB site on the edge of the CBD in 2007 for $39m.
The most recent parcels sold, bound by Queensbridge and Bouverie streets, spanned 6600sq m. They sold for more than $9000 per square metre.
Grocon last year sold two neighbouring sites on the corner of Bouverie and Victoria streets to Singapore’s Chip Eng Seng for $32m.
These two sales reflected a similar rate per square metre but had no height limits and Singaporean group is planning a super-tall unit tower.