CBD hotel development for sale

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JUST a few months after securing approval from Melbourne City Council for a 190-room hotel development, the Sands & McDougall complex at the north west edge of the CBD has been listed for sale with hopes of $75 million.

The three adjoining commercial buildings are owned by high net worth investors including Ozzie Kheir – whose development group, Resimax has just closed a major purchase at the Eynesbury estate – Probuild’s Phil Mehrten, and developer Frank Palazzo.

Clustered on the corner of Spencer St and Jeffcott St, the properties are being offered individually or as a whole through CBRE’s Mark Wizel, Josh Rutman, Lewis Tong and Scott Orchard.

Planning permits for a hotel and mixed use development project were recently obtained across the properties, comprising around 30,000sqm of buildable area. This would provide for partial demolition of the low rise warehouse at 102 Jeffcott St. development of a 23 storey hotel and conversion of two brick warehouses on Spencer St into office space.

The largest of the assets is the 7,363 sqm former Sands & McDougall building at 355 Spencer St, home to the printing and publishing firm for well over a century and now used for offices. Sands & McDougall was best known for its annual Directory of Melbourne publication that ran from 1862 to 1974.

“The repositioning and rejuvenation of older character buildings has become extremely lucrative in recent years, and this asset is perfectly placed to capture unsatisfied tenant demand for unique, but well-located, accommodation,” Wizel said.

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