640 Bourke Street sells as bargain hunter developers step in

Hong Kong group swoops on prime Bourke Street site as bargain hunter developers make their move.

Deep-pcoeted developers are moving in on Melbourne sites. Picture: AFP

Hong Kong-based Far East Consortium has snapped up a major development site in Melbourne’s central business district for $90 million in a counter-cyclical play that will see it develop a 68-storey apartment tower.

The purchase of the site at 640 Bourke Street from Shanghai-backed developer Besgate comes amid a switch in the market that has seen a series of office property groups swoop on unwanted apartment sites.

Besgate has also sought to exit its holdings in Melbourne as the city’s apartment market slows down and prices come under pressure.

Besgate last week struck a deal to sell another Melbourne site to apartment tsar Harry Triguboff, who recently ranked at No. 3 on The Australian’s The List.

Under that agreement, Mr Triguboff’s Meriton group snapped up a site in Melbourne’s King Street for about $29m and will develop a Meriton Suites apartment hotel, marking its first move into Victoria.

The latest acquisition is part of an emerging trend that has seen deep-pocketed unit developers pick up sites for new towers, spurred on by the belief that the market will be under-supplied as other groups exit.

Far East Consortium is backing the existing plans and said the property carried approval to be redeveloped into a major residential project.

Plans for a 68-storey tower, sitting behind a heritage building near Southern Cross Station, were approved in 2017.

The $234m project by Besgate was slated to include 813 units, as well as offices and shops. But the plans will see the three-level red brick Eliza Tinsley Building, dating to 1905, retained, with the tower set back 10m from the roof line.

Far East Consortium is an experienced apartment developer in Melbourne and its multi-tower Upper West Side on the site of the former Lonsdale Street power station has sold well.

“The acquisition is consistent with the group’s regionalisation strategy and allows the group to replenish its land bank in Melbourne, having pre-sold the majority of its available residential units at West Side Place,” Far East Consortium said.

That mixed-use development features four residential towers and two hotels.

Far East Consortium has also teamed with The Star Entertainment Group, and Hong Kong-based Chow Tai Fook Enterprises to develop Queen’s Wharf in Brisbane.

The off-market deal was brokered by real estate agent Colliers International, which declined to comment yesterday.

Besgate had first proposed an 85-storey tower on the site, but it was dubbed “extremely bulky” by Melbourne Council. Architects for the project were Rothelowman.

Besgate last year sold a site at 558-566 Swanston Street to Scape Student Living for about $31.5m.