Pask family to develop offices rather than apartments on East Melbourne site
Billionaire property developer Neville Pask has snapped up an old medical centre in East Melbourne on the city fringe with plans to turn it into a strata office building rather than develop apartments or a hotel on it.
Falling office vacancy rates in Melbourne are encouraging more developers to undertake commercial projects – East Melbourne has the lowest office vacancy rate nationally at just 2.5 per cent, according to the latest Property Council of Australia Office Market Report.
Mr Pask, who ranked 61st on the 2017 Australian Financial Review Rich List with a $996 million fortune, paid $12 million for the low-rise property on a near 1000-square-metre site at 204-206 Albert Street.
It will be the first office development for the Queensland-based Pask Group, which is primarily a residential developer of high-end apartment projects like the Millswyn residences in Toorak and big housing estates in the outer suburbs of Melbourne and Brisbane.
Selling agents Nick Lower, Josh Rutman and Jimmy Tat from CBRE said the successful buyer had paid about $1 million more than the other potential buyers – mostly residential developers – who had put in bids as part of a public tender campaign.
“Strategic CBD and inner-city land holdings continue to attract not only residential developers, but also those looking to deliver high quality commercial office projects looking to capitalise on the restricted supply of quality accommodation in Melbourne,” said Mr Lower.
“The office market in locations such as East Melbourne, Cremorne, Abbotsford and Fitzroy continues to go from strength to strength, particularly in terms of tenants willing to pre-commit to space,” he said.
The Albert Street building was put up for sale by its eight strata owners – mostly owner-occupier medical professionals – in the hope of securing a better price by selling collectively.
Recently, a group of 20 unit owners in a Southbank apartment block banded together in the hope of securing around $25 million for the building as a development site.
