Tightly held Melbourne CBD site offers significant development potential

22 November 2023

A significant landholding within the highly sought after East-End of Melbourne’s CBD represents one of the last remaining undeveloped sites of its size – offered for the first time in 30 years – holds significant development potential with surrounding building height precedents of more than 40 levels.

Bordered by Russell, Exhibition, Victoria and La Trobe streets within metres of RMIT University and within easy reach of the University of Melbourne, 41-45 MacKenzie Street (corner Grange Place) comprises two existing office buildings totalling 2800 square metres that was formerly home to the Police Association of Victoria and has basement parking for 17 cars, and a two-storey building at the rear, which provide developers with short-term holding income.

Zoned Mixed Use, the 1013 square-metre site offers a combined 70 metres’ street frontage to MacKenzie Street (20 metres) and Grange Place (50 metres), facilitating any future redevelopment.

According to JLL’s Head of Capital Markets Victoria, Josh Rutman, who is marketing the property with colleagues Nick Peden and Mingxuan Li, the property is expected to be highly sought by developers looking to take advantage of the zoning, the site’s University Precinct location and very strong demand for student accommodation, as well as for a range of other uses.

“This is an exceptional opportunity to explore a range of redevelopment, value-add, landbank and owner-occupation opportunities in a prime East-End CBD location with excellent site access and short-term holding income,” Mr. Rutman said.

“Embedded within the university precinct, close to RMIT and Melbourne universities, the location is perfectly positioned for student accommodation but also offers real potential for hotels, apartments, build-to-rent, co-living, office, education, hospitality and more (STCA).”

Owned by a private Melbourne-based family since 1994, the property represents one of the last remaining 1000 square metre-plus landholdings in the eastern end of the CBD.

Mr. Peden said any development on the site would stand to benefit from an unprecedented level of public and private investment in the immediate precinct, as well as the obvious capital value uplift over time amid the continuing growth of Melbourne’s population.

“Since the inception of the World’s Top 10 city index in 2002, Melbourne has ranked within the top 10 every year backed by its world-class access to healthcare, education and infrastructure, and this has not been lost on developers of successful residential developments, particularly student and apartment projects in this precinct.

“With Victoria’s population expected to increase to around 9 million in coming years, as it topples Sydney’s population mantle, that growth will continue to drive demand and underpin the feasibility of such projects.”

Mr. Rutman said it would be difficult to find a site with so many positive attributes at a time when demand for residential accommodation in its many guises was at an absolute premium.

“The property’s East-End CBD location provides a unique catchment of people including thousands of students, shoppers, theatre-goers, office workers and tourists,” he said.

“The property is immediately surrounded by some of Melbourne’s most popular attractions including the CBD retail core, Queen Victoria Market, Her Majesty’s Theatre, the Royal Exhibition Building, Carlton Gardens, Melbourne Museum, Melbourne Central and Parliament train stations, and the new State Library train station – and all within a relatively easy stroll.

“We expect very strong demand from local, interstate and international developers and investors for this significant development opportunity.”

The property is for sale by international Expressions of Interest closing Friday, 1 December, at 2pm (AEDT).