Eight residential property owners at Cheltenham, dubbed the Bayside 8, have agreed to sell their properties as one in what is believed to be the biggest alliance of owners for the purpose of maximising returns yet seen in Melbourne.
According to marketing agents, Savills Julian Heatherich, Jesse Radisich and Nick Peden, the property, likely to fetch around $9 million, is the largest bayside consolidated development site opportunity ever to be offered to the market.
“We believe this to be a first in terms of the number of owners but also in terms of the size of consolidation in the Bayside and surrounding area, certainly it is one of a few substantial development opportunities that has become available in the Bayside municipality,” Mr Heatherich said.
He said the owners had considered the location and size of the property, with main road frontage, within 300 metres of the proposed new Southland railway station, and just down the road from Westfield Southland shopping centre and Bayside beaches, would make an exceptional multi-unit residential development site.
“The location would appear to be perfect for higher density development with the new station at Southland – due for completion next year according to PTV – a major consideration,” Mr Heatherich said.
Zoned General Residential 1, the 375-389 Bay Road property comprises eight adjoining sites, totaling 4,715 square metres, with 135 metres frontage to Bay Road, located directly opposite a retail shopping strip and just down from Southland.
Consolidation of residential sites for high density development has been a boon for householders looking to capitalize on new zoning regulations in activity centres and maximize their returns on investment.
Savills has sold over 120 residential properties in newly rezoned areas over the last 24 months in suburbs right across Melbourne including the first known example of this type of consolidation sale, when three neighbors in Bent Street, Bentleigh sold their adjoining homes to a China based developer for $5.76 million in June 2014, in a deal also negotiated by Savills, being a hefty premium on anticipated individual values.
Mr Heatherich said such listings had attracted hundreds of enquiries from local, interstate and overseas buyers seeking an entry into Melbourne’s lucrative residential market.
“We have been inundated with enquiry every time we list this type of property. Developers have been very keen, not simply because of the availability of a site, but because of the certainty provided by policies and zonings designed to offer higher density housing to a growing Melbourne population in locations with significant established amenity.
“Owners, particularly those in the sand belt and surrounding bayside suburbs have become savvy vendors and developers have been happy to oblige with purchases that have often returned more than the individual owners could have hoped for,” Mr Heatherich said.
Mr Peden said while consolidation sales had been around for two years or more, there was little sign of a slowing of the trend as apartment sales continued to boom and developers competed for the best opportunities.
“Melbourne’s population continues to grow and that means governments need to respond with housing options and the nearer those options are to existing services and infrastructure the better.
“So population growth is the key and while Melbourne remains the growth capital – and that looks likely for some time to come given population projections – the competition for development opportunities in the inner suburbs will only intensify especially as options in the best locations diminish.
“And of course that demand from developers in turn will continue to drive owners to combine with their neighbors to offer up these sorts of opportunities,” Mr Peden said.
The property is for sale via Expressions of Interest closing Wednesday, July 6 at 2pm.