Adelphi Hotel back on the market as Sydney buyer sticks to home ground

The Sydney property company that swooped on the Adelphi Hotel last year is kissing its Melbourne aspirations goodbye and putting the Flinders Lane property back on the market.

Property hospitality firm Virtical, currently embroiled in court action over the aborted $61 million acquisition of Kinselas and the Courthouse Hotel in Sydney’s Oxford Street, is hoping to flip the hotel for more than the $25 million it paid in May 2023.

The Adelphi Hotel on Melbourne’s Flinders Lane is back on the market.

It has refurbished the Adelphi in the past 12 months. Nomad remains open while another restaurant and bar closed three months ago.

Virtical managing director John Palasty said: “We are reluctantly putting the Adelphi on the market as it is a great asset with enormous potential. However, we have decided to focus on our Sydney CBD assets.”

Virtical is also exiting developments in Southport, Queensland, and Newcastle in NSW, to concentrate on Sydney. The firm is refurbishing the Metropolitan Hotel on George Street and working on a plan to add 14 floors to the Republic Hotel on Pitt Street, where it has already spent $10 million on renovations.

JLL’s Nick Macfie and Peter Harper, with Savills’ Nick Lower and Benson Zhou, are handling the Adelphi sale campaign.

Virtical was the latest in a string of Sydney investors coming to Melbourne for a crack at the hotel and dining sector, but it’s not as easy or as cheap as it looks.

Justin Hemme’s Merivale Group is the highest profile, having spent $37 million on Tomasetti House on Flinders Lane – where renovations are stalled – and a further $17 million on Kantay House on Meyers Place.

Another Sydney buyer, Serene Capital, gained a foothold in suburban Ringwood last month, buying the Sebel for more than $30 million, in a deal negotiated by Macfie and Harper. The property settled this week and has already been rebadged as a Rydges.

Swansong

Sydney-based developer Fortis has made a fresh play in the Melbourne market, snapping up a Richmond showroom for $13.6 million.

The two-storey building at 550 Swan Street, in the heart of the office end of the strip, was sold by KordaMentha, acting as receivers and managers to collapsed property developer the Residence Co.

The 2758-square-metre building is on a 1660-square-metre site with Commercial 1 zoning and is close to a myriad of office projects, including Botanicca and the new Australia Post office.

550 Swan Street, Richmond

Fortis, a subsidiary of boutique property investment firm the Pallas Group, is planning a new 10,000-square-metre project on the site.

Fortis has more than $570 million worth of projects in its development pipeline, including a landmark $170 million Double Bay redevelopment, an $80 million commercial building in Manly and the $320 million twin-tower Wiltshire House development in Richmond.

Originally proposed as a pure office play, the second tower in Wiltshire House has now been reconfigured to offer 50 apartments.

The deal was managed by Cushman & Wakefield’s Daniel Wolman, Hamish Burgess, and Joe Kairouz, together with JLL’s Jesse Radisich, Josh Rutman and Tim Carr.

Geelong

Aged-care developer and operator Levande has made its first play in the Melbourne market since buying Stockland’s retirement village portfolio in 2022, spending more than $20 million on an infill-site in Geelong.

The 4.71-hectare parcel of land at 140-156 Colac Road and 246-248 South Valley Road in Highton is opposite the Waurn Ponds shopping centre on the western fringe of the growing city.

Collier’s agents Chris Nanni and Ben Young said the sales campaign generated interest from local and national residential, aged care and retirement living developers.

Levande, owned by Swedish investment giant EQT, paid nearly $1 billion for Stockland’s 58 retirement villages in February 2022. It has deep pockets and is planning to build 400 to 500 independent living units each year for the next couple of years.

The company recently bought 14 properties on a 1.25-hectare parcel of land in Sydney’s Castle Hill Showgrounds precinct, where it is planning a 217-unit mid-rise village.

Also in Geelong, a Melbourne-based developer has outlaid $12 million to buy the old Flinders Peak Secondary College at 97 Hendy Street.

The school closed in 2010 after being merged with Northern Bay College. The sale price equated to $1.61 million a hectare across the 7.3-hectare site.

The transaction was handled by Gross Waddell ICR’s Danny Clark, Andrew Waddell and Glenn Ye.

Acorn

The leafy eastern suburbs rely on nurseries to keep those borders in a riot of colour, but now one of its stalwarts could be on the way out.

John Van Der Horst, the award-winning owner of the Acorn Nursery at 669-673 Canterbury Road, has put the 3035-square-metre land holding on the market.

The Acorn, which includes the busy Oaks Cafe, is offered with a short-term lease back, which should keep the annuals flowering this spring.

The Acorn Nursery, 665-677 Canterbury Road, Surry Hills.

Records show the property changed hands in 1977 for $100,000. The nursery is near the intersection with Warrigal Road, just over the Boroondara border in the City of Whitehorse, on the corner of Beatrice Avenue and Sydenham Lane. It is near the local primary school and just a short trot to the new Union railway station.

JLL agents Mark Stafford, Jesse Radisich, Josh Rutman, and MingXuan Li are handling the campaign.

While the zoning is Neighbourhood Residential, Stafford said Whitehorse has been set a target to increase its dwellings by 79,000 by 2051.

The going rate for eastern suburban development sites of this size is around $7 million.

Glenroy

The old Glenroy Library is heading to auction, a couple of years after the Merri-bek Council community opened the new library, the Glenroy Community Hub, designed by architects DesignInc.

The open-plan, single-storey building is on a large 1831-square-metre site at 737 Pascoe Vale Road, located at the entrance to the local shopping strip and not far from the Metropolitan Ring Road. It is going to market for the first time in 54 years, with an auction scheduled for August 16.

Fitzroys’ agents Ervin Niyaz and David Bourke are handling the sales campaign and are expecting more than $3.3 million.

“This is a generational opportunity to occupy, invest, develop or re-purpose in Glenroy’s core commercial activity centre,” Niyaz said. “Not many opportunities like this come to market, particularly assets of this type being divested by a council. It could be another 50-plus years until another sizeable asset in this tightly-held activity centre is made available.”

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