Developers descend on permitted South Yarra sites

Developers are targeting inner-city Melbourne hotspot South Yarra as the supply of potential development sites dwindles.

CBRE has sold three permitted development sites in South Yarra in the last three months, in deals totalling almost $40 million.

Another three sites have sold to both local and offshore developers over the past nine months, with land values soaring to between $12,000 and $16,000 per square metre.

Associate director of CBRE Victorian Developments, Julian White, says despite booming prices, demand for South Yarra sites has continued unabated.

“The major trend of 2016 has been a flight to quality, with heightened demand for prominent landholdings in premium locations,” White says.

“Secondly, luxury apartment product has emerged as the most popular sector of the Melbourne apartment market, with developers confident of achieving $20,000 to $30,000 per square metre for new apartment product within locations such as the Domain and Fawkner Park precincts of South Yarra.”

In another test for the market, a 1784sqm site at 146 Toorak Rd West is being sold via an international expressions of interest campaign.

CBRE’s Mark Wizel says the site comes with a town planning permit, which significantly increases its allure for developers.

“Given the tightly-held nature of Domain precinct and protective planning controls, buying with a permit in place will save developers substantial time and cost,” Wizel says.

“As a result, we expect strong interest from Melbourne’s leading local developers and a range of developers from Asia, including mainland China.”