The Paris-end of Collins Street is full of gleaming local and international luxury shopfronts. Some are papered over for renovations and new tenants, but they are polished and clean.
All except 18-20 Collins Street. Water is leaking from air conditioning units over the ground floor pharmacy. The remaining two street front shops languish empty and dirty, as they have done since well before the pandemic.
18-20 Collins Street is a modernist building that is being quietly taken over by some rich listers. Credit: Paul Jeffers
Ownership of the Coates Building is one of the quietest open secrets on Collins Street. Rich-lister developers Harry Stamoulis and Dug Pomeroy have spent several years buying up units in the 13-storey modernist building and now control the property.
For decades, medical, dental and allied health practitioners have owned the 13-storey Coates Building at 18-20 Collins Street for decades via an archaic company share structure. Units in the building equals shares in the company.
The ownership structure means the building and its offices are worth about half that of a freehold building or strata-titled offices and the most recent valuation puts the building’s worth at $41 million.
In 2016, Harry Stamoulis bought the One Collins Street across the road for $125 million.
Stamoulis, whose family fortune derives from his late father Spiros Stamoulis’ soft drink business, Gold Medal Drinks, has been trading CBD properties for years.
Sources suggest more than 75 per cent of the 7000 square building and the shares would be needed to control the board.
Stamoulis senior was also a major benefactor and driving force behind the restoration and redevelopment of Melbourne’s Immigration Museum in the Old Customs House in Flinders Street and the Royal Mint building on William Street, where the family established the Hellenic Museum in 2008.
Stamoulis and Pomeroy, a veteran property developer, are also currently in due diligence to sell the $200 million Woolworths state office and distribution centre in outer suburban Mulgrave.
Repeated requests for comments or discussion about Stamoulis’ and Pomeroy’s plans for the building have gone unanswered. No CBD property players were willing to speak on the record.
Records show control of the company’s board flipped during 2020. The 2021 annual report reveals Stamoulis and Pomeroy and a clutch of other business people and lawyers joined the board between December 2020 and January 2021.
Unfortunately, the records held by the Australian Securities and Corporations Commission fail to break down the ownership of the 600,000 shares in the Coates Building Limited, an entity set up by the building’s architect John La Gerche in the late 1950s to develop the property.
But sources suggest more than 75 per cent of the 7000 square building and the shares would be needed to control the board.
According to the building’s extensive listing in the Hoddle Grid Heritage Study, La Gerche demolished three bluestone buildings to erect the innovative glass curtain walled building in 1959. He had previously developed 100 Collins in the same way – selling shares in the company to fund the project.
The building is listed as significant and is named after Walter Coates, who first bought the land in 1840.
18-20 Collins Street is a modernist building that is being quietly taken over by some rich-listers. Credit: Paul Jeffers
The first block of Collins Street is prime CBD territory. Coates sits on a 734 square metre plot between Chanonry at 14-16 Collins Street, which art dealers Gary Singer and Geoffrey Smith bought for $12 million in 2015 and Farrer House at No.24 which is majority owned by the Victorian Farmers Federation. No.10-12, Victor Horsley Chambers changed hands in 2016 for $18.67 million
At the rear is the Sheraton Hotel on Little Collins Street, which opened in 2014 and the Lyceum Club.
Last year, building levies in the Coates Building rose sky-high to help fund essential works and many tenants started looking for new digs, leaving the building with empty space.
The company’s most recently filed financial reports show revenue doubled in 2022 to more than $1.74 million from $844,004 and cash in the bank increased to $1.06 million from $277,576.
The books certainly look quite plump for a building which has lost tenants and whose ground floor has been empty for years.