Carnage on leafy St Kilda boulevard as property values crash-land
Capital gain
A Queens Road tower on the city fringe, which basketball tsar Larry Kestelman sold for $59 million in 2019, has changed hands for half that sum.
Developer Alta Property Partners, led by ex-Fridcorp boss Nigel Givoni, has paid “in the high $20 millions” for the 19-storey office at 10 Queens Road.
10 Queens Road has sold in the high $20 millions.
The vendor was a subsidiary of Taiwanese-backed development company Everland Global which went bust last year and has since been struck-off owing around $60 million.
That’s slightly more than it paid for the tower where Larry Kestelman still runs his various property and basketball businesses while he builds a new office in Cremorne.
The Queens Road tower is on a large 2300-square-metre site overlooking Albert Park Lake.
In 2023, it was for sale at about $50 million, but six months ago, the price dropped to the low $30 millions.
It’s understood there were 12 sharks – sorry, bidders – circling the property.
The transaction was negotiated by Cushman & Wakefield agents Oliver Hay, Daniel Wolman and Leon Ma, and Colliers’ Jozef Dickinson, Aaron Choong and Alex Browne. They declined to comment.
In trouble
The St Kilda Road office precinct has been in trouble for years, with vacancy rates rising steadily. They are now just shy of 30 per cent, according to the latest Property Council of Australia office report.
Values along the strip have crash-landed, with many buyers who purchased in better times selling at steep discounts. Everland didn’t have much luck, but nor did many others who bought in the pre-Covid boom period and tried to sell after the music stopped.
Many of the boulevard’s offices, as well as others in Queens Road nearby, are likely to be repurposed as residential developments.
Everland also bought an art deco apartment complex at 596 St Kilda Road for $34 million in 2017 and sold it for $25 million in 2020. The same complex is for sale again with a price expected in the high $20 millions through Savills.
596 St Kilda Road had a development permit for a Bates Smart designed tower.Credit: Artist's impression
Further along the tree-lined boulevard, fund manager Bayley Stuart picked up Australian Unity’s 468 St Kilda Road for $42.55. Its book value was $63 million.
And developer John Marro has paid $28 million for No.432 which Scottish fund manager abrdn bought for $41.6 million in 2014.
The Mars Group has just relisted 420 St Kilda Road for around $50 million. The Hong Kong-based company paid $98 million for the 10-storey building in 2019. In 2023, the company listed it for $85 million, but there were no bites.
The 10,435 sq m building is 80 per cent leased with a 2.5 year average lease term, earning nearly $6 million a year.
Knight Frank’s Trent Preece, Tom Ryan and Alice Crowley and JLL’s Tim Carr, MingXuan Li and Josh Rutman have the listing.
Reports lodged by various administrators and liquidators for the Everland Global network of companies make for sober reading.
Everland director Michael Xie told liquidator Glen Kanevsky the company had stopped operating in May 2023 and blamed COVID-19 and “a shortage of investor funding for cash flow issues.”
The sole secured creditors to parent company Everland Global – Hung-Chang Lee and Wen-Chin Chang – claim they are owed $55.5 million against loans extended to Everland Queens Road, the company which owned the tower.
However, it had no assets and a mere $32 in the bank. Kanevsky said there wasn’t even enough money to pay his bills let alone pursue others. Its chief creditor, the Taipei-based First Commercial Bank, declined to record its debt publicly in case it undermined the value of the property.
Directors Xie and Tim Chang claimed to be owed $552,000 and $15.61 million respectively, according to one of the Everland Queens Road reports lodged with the Australian Securities and Investments Commission.
Morry’s dilemma
Publisher and property developer Morry Schwartz has given up plans to build his headquarters on the old British Crown Hotel on Smith Street.
Schwartz told Capital Gain he had twice attempted to get a permit for an eight-level timber office building “but couldn’t get it. So it’s extraneous to my needs”.
The old British Crown Hotel at 14-18 Smith Street, Collingwood.
“It’s a great location. You could make a major pub out of it,” he said.
Schwartz, publisher of The Saturday Paper, The Monthly and Black Inc Books, bought the pub in 2019 for $5.66 million.
The pub is on a 555 sq m site on the corner of Mason Street and holds a 1am liquor license.
Cushman & Wakefield’s Daniel Wolman, Anthony Kirwan and Raphael Favas have the listing and are expecting around $5 million.
Morry Schwartz, publisher of The Saturday Paper, The Monthly and Black Inc Books, bought the pub in 2019 for $5.66 million.Credit: Peter Braig
It’s not the only pub up for sale in the neighbourhood. The Baden Powell Hotel around the corner at 61-65 Victoria Parade – currently trading as the Continuum Hotel – is also on the market.
The Continuum boasts a glittering fit-inducing fit-out “where heritage meets electric” and a 3am liquor licence. It’s on a 509 sq m site on the corner of Cambridge Street and has a flexible lease which includes a demolition clause.
The Baden Powell Hotel, 61-65 Victoria Parade, Collingwood.
Agents Brendan Burmistrow and Michael Ryan, principals of newish agency iDeal Commercial, have the listing and are expecting offers of around $6 million.
Victorian villa
The former St Kilda home of Geoffrey Satchell’s media production house Editel is up for grabs.
Expansive post-production studios were built behind a Victorian villa in 1999 and became the place where Kath & Kim and a host of lifestyle and game shows, and advertisements were prepared for broadcast after filming.
Editel’s production house at 67 Wellington Street, St Kilda.
The property includes six edit suites and sound recording studios, a client lounge and bar, and a separate two-level apartment.
Stonebridge agents Dylan Kilner, Max Warren and Chao Zhang are handling the sale and expect around $10 million. After 25 years on Wellington Street, Editel is off to a new base in Port Melbourne.
Little Lon
A former hotel in the historic Little Lon red-light district is up for sale. Records show nightclub co-owner Monika Ippolito paid $1.71 million for the three-storey Leitrim Hotel at 128-130 Little Lonsdale Street in February 2008.
128-130 Little Lonsdale Street, Melbourne.
Ippolito and husband Camillo Ippolito have been the force behind a swag of Melbourne nightclubs and restaurants in the past 35 years, including Revolver Upstairs and The Toff in Town. Camillo Ippolito was a mainstay of the Melbourne nightclub scene in the 1980s, running Inflation and Sub-Terrain.
The Little Lon property has a ground floor office with a two-bedroom apartment upstairs. It was renovated 10 years ago and boasts a courtyard and a car space.
There’s less of the red light in the area in the 21st century. Across the road, Charter Hall has turned the Wesley Church into a swanky office building and construction is well under way on Perri Projects and Pellicano’s Bennett’s Lane building.
Cushman & Wakefield’s Kirwan, Hay and George Davies have the listing and are expecting between $4-4.4 million.
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