A boutique hotel will form part of a landmark $200 million development on Melbourne’s Southbank incorporating a tower designed as a “true vertical village”.
PDG Corporation has secured an agreement with the City of Melbourne to develop the parcel of land at 132 Kavanagh Street into a 32-storey complex containing a hotel, 176 apartments and 40 affordable housing units, plus shops and community facilities.Following a tender process, the council accepted the developer’s offer of $16.5 million under an agreement which will see PDG deliver 1000 sqm of community space to be owned and run by the City of Melbourne.
The developer is already working with council on the nearby $450 million Munro development, which includes Melbourne’s first build-to-rent complex, and says a build-to-rent element may form part of the new development.
“Our vision is a true vertical village on the park, high-quality residences, affordable housing, fine-grain retail and community facilities,” managing director Vince Giuliano told The Urban Developer.
“It’s not often you get an opportunity to develop in a location like this. There are no adjoining high-rise buildings and an abundance of green open space.”
Construction is expected to begin on the site (artist impression pictured) late next year, with completion planned for the 110-metre tower development in 2022.
$35m for unbuilt hotel
A modest central Melbourne office block with approval for transformation into a hotel has meanwhile sold for a rumoured price tag of $35 million.
The property at 190 Little Collins Street was sold by developer BPM and the Uniting Church with a permit for a 26-level Elenberg Fraser-designed hotel development.
The eight-storey office tower was acquired by Jeff Xu’s Golden Age Group with planning permission for the 184-room hotel, a proposal which was originally refused by Melbourne Council but approved last year after the church took the case to the Victorian Civil and Administrative Tribunal.
The Little Collins Street property, which includes a chapel, was sold with a leaseback to the Uniting Church.
Colliers broker Daniel Wolman said while the property had the benefit of a high-quality permit for a hotel development, the existing improvements were the major market attraction.
“The result reflected the very strong demand for office investments in the nation’s tightest CBD office market,” he told The Urban Developer.
Melbourne is now the tightest CBD office market in Australia with an office vacancy rate of 3.2 per cent and net face rents forecast to go up by a further 9 percent by the end of 2019.