The former Clayton West Primary School has sold for an eye-watering $23 million in a deal that added $9 million to its price in just five years.
It’s not yet clear if the new owner, Chinese-backed developer Heng Si International, will look to amend the 96-townhouse project currently approved at the site and branded “awful” by the local council.
But those who worked on the sale believe it’s an early sign homesellers hoping to team up with their neighbours for a premium could soon cash in after a lull in demand from the city’s developers.
In 2014 the Spire Group bought the more than 2ha property at 10 Alvina St, Oakleigh South for $14 million and bulldozed it to make way for its planned townhouse complex.
They’re now walking away from the site after five years with an extra $9 million up their sleeve, after a December 19 sale.
CBRE’s Julian White worked on the deal and said he did not know what motivated Spire to sell the site.
“They didn’t give specific reasons for the sale, but were happy to sell for a $9 million uplift,” Mr White said.
Locals, including Monash Council, had opposed initial plans to redevelop the site, with councillors referring to the proposed townhouses — some to be built on sites just 5m wide — as “dog box” homes.
Mr White said the hefty price rise despite a market correction between sales was a sign developers were coming back into the market.
“We were really happy with that result, the development site market’s wheels are starting to get back in motion,” Mr White said.
“The low point of the development site market was probably around the start of last year, but it really deteriorated the year before that as well.
“Since December 2018 there’s been a bit of a bounce.”
While the buyer has backing from mainland China, a large number of local developers were among the 11 groups to make a bid for the site.
Clayton West Primary School merged with Clarinda Primary in 2006.
Gross Waddell director Andrew Waddell also worked on the sale and said it was potentially good news for homeowners.
Mr Waddell said while the massive block was more comparable with “30 original house blocks”, a broad uptick in demand for development sites over the past six months meant homeowners considering teaming up with their neighbours might be able to cash in again after a lull across the preceding 18 months.
“My take is that in the last six months there seems to be a bit of a revival and renewed interest in certain pockets,” Mr Waddell said.
“It takes anything from 12 months to two years to get plans and permits, and they (developers) will be looking for the next wave now.”