West Melbourne’s Sands & McDougall building to survive after $38m sale
Horse racing identity and developer Aziz “Ozzie” Kheir is a step closer to an almost $60 million trifecta after a $38.5 million West Melbourne sale.
The big ticket sale has put a syndicate headed by the hotelier more than $10 million ahead in less than five years.
Alongside developer Frank Palazzo and commercial builder Phil Mehrten, Kheir bought 355 Spencer St for $27.2 million as part of a three-property $38.8 million package in mid 2015.
Kheir and the other owners had approval to develop a mixed-use precinct and hotel at the three-property site, but abandoned the plans in December.
Built in the 1800s the landmark 355 Spencer St property was originally the home to publishing and lithography firm Sands & McDougall, which produced everything from books to maps and tram tickets for more than 100 years until the business closed in 1994.
CBRE’s Mark Wizel says the latest sale is notable for commercial property owners as the buyers, AVARI Capital Partners, are a fund management group “backed by Chinese capital”.
Kheir and his partners are selling the West Melbourne building and two neighbouring sites.
“It could be an early sign that potentially capital markets could open up from China chasing Australian property,” he says.
“Although the buyer hasn’t come directly from mainland China, it’s an early indication that commercial property is likely to stay on the radar there.
“That’s pretty significant in the current context. There aren’t a lot of transactions of that figure being done.”
AVARI Capital Partners boss Alan Liao says it will look to add value to the 355 Spencer St property, including refurbishing it, incorporating a bar or cafe and adding end-of-trip facilities.
They also confirmed they would not seek to demolish the more than century-old building.
“355 Spencer St represents a structurally sound, superbly designed and aesthetically pleasing building,” Liao says.
“To knock it down and redevelop would not achieve its best and highest use.”
102-108 Jeffcot St, West Melbourne sold for $9.5 million.
Last week it was revealed Kheir, the only person to own horses that have won both the Melbourne Cup and The Everest racing events, collected a $3.5 million windfall from the $9.5 million sale of one of the two other properties at 102-108 Jeffcott St, West Melbourne.
The third property at 371 Spencer St is still for sale with expectations it will raise another $10 million.
This article from The Herald Sun originally appeared as “Sands & McDougall building sold in ‘Ozzie’ Kheir $60m trifecta bid”.
