SYDNEY MORNING HERALD:
Melbourne:CostaFox snaps up hot Cremorne site for $12 million
Boutique developer CostaFox has paid $12 million for a Cremorne site offloaded by one of the hot precinct’s key players.
Property values in Cremorne’s office precinct, dominated by creative and technology industries, have surged in the past two years - along with the rents which are pushing well past $500 a square metre for new space.
Title deeds show Icon director Ashley Murdoch paid just over $7 million for the 1180 square metre site at 1-11 Gordon Street, which he amassed in two lots over the past couple of years as a private investment.
The off-market deal, at $10,169 a square metre, represents a 67 per cent increase in value. It was negotiated by Jeremy Gruzewski, who recently left Colliers International for boutique agency Beller.
The sale follows hot on the heels of an investment deal in Cremorne, struck on a sharp 5 per cent yield, handled by Teska Carson director Adrian Boutsakis.
Rising rents are driving the surge in values. Mr Boutsakis recently leased the whole of a new 1420 square metre building at 8 Gwynne Street for $538 a square metre to Ratio Consulting before construction was completed.
Cremorne Studios, a five-level building at 17 William Street with no carparks, is also fully let before completion, with tenants paying $500 a square metre net, he said.
“Sales rates are $10-12,000 a square metre depending on the development site and it is driven by the rents. Those prices stack up if you’re getting over $500 a square metre in rent,” Mr Boutsakis said.
CostaFox Developments is also planning a new 5000-6000 square metre office project for 1-11 Gordon Street.
Mr Gruzeswki said “the property has no plans and permits in place but we would expect a 6-8 level commercial office building will be developed to feed the strong tenant demand".
"Any development will have to be sympathetic to the heritage façade which means a cool building will be developed to capture the eye of the creative types wanting to be in the area," he said.
SYDNEY MORNING HERALD: 17/4/19:
Melbourne:CostaFox plans new Cremorne office after swooping on $11.5m site
Boutique developer CostaFox is doubling down on the growing reputation of Melbourne’s hippest office market, inner-east Cremorne, having swooped on a site opposite its planned new office development in Gordon Street.
Hot on the heels of gaining a planning permit for a seven-level, 5000 square metre office building on its site at 1-11 Gordon Street, CostaFox has purchased the land directly opposite at 22-26 Gordon Street where it hopes to build another 5000 sqm office.
The developer paid $11.5 million for the 974 sqm site at 28 Gordon Street, which was offered by a group of townhouse owners who banded together to put their seven Neometro-built homes on the market.
The deal values the land at a rate $11,800 per sqm.
“The site complements our other existing holdings in the street,” Mr Fox said. The transaction was negotiated by Teska Carson’s Matthew Feld who said the owners attracted a premium by offering their homes in one line.
The tiny suburb of Cremorne has become a sought-after hub for technology and creative companies, pushing up land values and rents and prompting a slew of new developments.
Last year Caydon Group secured accounting software firm MYOB as a tenant in its mixed-use Malt District on the river’s edge at the former Nylex silo site.
Seek will move into a new office at 60-88 Cremorne Street and online real estate business Domain is negotiating space in investment firm Bayley Stuart’s speculatively built office on the grounds of the old Nuttelex factory at 600 Church Street.
Perched on the edge of Melbourne’s CBD, Cremorne’s success has also fed a mini city-fringe office development boom in nearby suburbs such as Collingwood, South Yarra and South Melbourne.
Having gained a planning permit for its first Gordon Street office, which is on the site of the former Sing Sing Studio, CostaFox will move ahead with construction of a seven-level office that it hopes to complete next year.
Mr Fox said the office’s 900 sqm floorplates designed by Fieldwork Architects would hit a “sweet spot” because it was timed to come to market before a flood of competing projects.
If approved, the sister building on the newly purchased site would be similar in size and designed by the same architects, he said.