The owner-developers of three neighbouring commercial buildings in Melbourne’s CBD have sold an historic six level office building (built in 1888) for $38.5m and adjoining single level property for $9.5m.
The vendors, hotelier and racehorse owner Aziz Kheir, Probuild founder Phil Mehrten and developer Frank Palazzo had hoped to see $75m for the three sites however the final site at 371 Spence Street has a price tag of $10m, suggesting the combined sales will be lucky to reach $58m, -22% less than expected.
The properties were marketed by CBRE.
The Group acquired the amalgamated site from investment house Hume Partners for $38.8 million in 2015, so will still generate a reasonable return.
The trio secured a hard-fought development approval for a 23-storey mixed-use tower in September last year. The $56 million scheme, designed by architecture firm Hachem, included a bridge connection built over McDougall Lane.
The historic 355 Spencer Street property was acquired by Avari Capital Partners who intend to refurbish and release the existing office space. In late 2018, Avari also acquired 90 Crown Street Woolongong for $50m
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