- The sites were acquired for circa $26M
- Fortis will hold the commercial buildings as long-term income-producing assets
- The developers pipeline is over $2B
Developer Fortis has announced the $26 million purchase of two new sites in Richmond and South Melbourne respectively, which will be developed to offer premium commercial and retail space.
Fortis intends to hold the commercial buildings as long-term income-producing assets, with non-bank lender Pallas Capital funding the acquisition and development.
The 907sqm site at 1 Little Rensey in Richmond is next to 8 Brighton Street where a mixed-use $115 million Fortis project is currently underway
The circa $16 million transaction was negotiated by Ben Baines, Ted Dwyer and Daniel Wolman of Colliers.
“The campaign for 1 Little Lesney Street was well received by the market, with in excess of 100 enquiries,” Mr Baines said.
“Experienced local and Asian developers made up the majority of these enquiries.”
“The site’s prime location, with direct access to world class amenity, was a major drawcard for potential buyers, along with the planning flexibility on offer. “
“Although the site was permitted, it represented a genuine opportunity to amend to commercial office, residential apartments and/or hotel (STCA).”
The proposed new build is expected to deliver 5,500 sqm net leasable area (NLA) across 12 levels with various amenities. Planning applications are expected to be submitted this month.
The 697 site at 122-132 Moray Street in South Melbourne was acquired off-market for circa $10 million. A seven-storey site has been proposed with ground-floor retail and 2,800 sqm of NLA, representing the first commercial Fortis project in the suburb. The planning application is due to be submitted during the current quarter.
Charles Mellick, director at Fortis, said over the past few years there has been an increased demand for premium city-fringe commercial offices in the Victorian capital.
“In an endeavour to harness this opportunity, our latest sites in South Melbourne and Richmond will offer a high-end point of difference to the fringe office market and add to our growing half a billion dollar portfolio of commercial assets in Melbourne,” he said.
“Our national commercial portfolio is currently well in excess of a billion dollars.”
The end value of Fortis’ Melbourne development portfolio is $1 billion with a $1.25 pipeline across Sydney.
