Malaysia’s SP Setia chase Melbourne tower glory with $114m Carlton purchase
One of Asia’s top developers has swooped on an inner-city Melbourne site, betting the gloom will lift from the apartment market.
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Malaysian property giant SP Setia is showing its faith in Melbourne’s high-rise apartment market and has paid $114m for a major site in inner-city Carlton.
The company picked up the property from a Chinese developer that had bought during the last property boom.
The site is part of a broader former CUB development site once controlled by Grocon but has since been developed out as high-rise units and student accommodation.
The purchase shows that overseas developers are willing to bet on a resurgence in Melbourne’s downtrodden apartment market, partly spurred by the prospect of lower interest rates and buyers in their home markets chasing safe havens like Australia.
Melbourne has proven a tough environment for both local and foreign investors and many Asian groups are steering clear of commercial property in Melbourne, citing the state’s heavy tax regime imposed on offshore buyers.
But, a series of purchasers signal greater confidence with local players including Orchard Piper and Cbus Property buying sites.
SPSetia has already got a strong record in Melbourne and the penthouse in one of its landmark developments, Sapphire by the Gardens, sold to local businessman Adrian Portelli for a record-breaking $39m.
That double-storey penthouse is on levels 57 and 58 in the Sapphire by The Garden’s residential tower, which is linked to the upcoming five-star flagship Shangri-La hotel.
SP Setia has already started buying other sites and picked up an office block from Mirvac in the Melbourne CBD on La Trobe St for $88m last year.
SP Setia dumped a planned office project and is instead building a large residential block, as part of the trend of converting sites into apartments.
The Carlton deal was dubbed a landmark transaction by the sales agents, who said it underscored the enduring appeal of Melbourne’s inner-city development market.
The purchase by the Malaysian property giant is Carlton’s largest development site sale in more than a decade.
The site, at 185–195 Queensberry Street and 46–78 Bouverie Street, spans 6561sq m and is within the Carlton education precinct.
It is surrounded by universities and is considered well-placed for a mixed-use development comprising retail, residential, and purpose-built student accommodation.
The off-market deal, brokered by Leon Ma, Oliver Hay and Daniel Wolman of Cushman & Wakefield, is viewed as a vote of confidence in the city’s long-term growth prospects, despite prevailing market headwinds. Colliers Tim Storey advised the purchaser.
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Originally published as Malaysia’s SP Setia chase Melbourne tower glory with $114m Carlton purchase
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