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As seen in the Source link, written by realestatesource.com.au on 2019-11-01 05:50:11

EXCLUSIVE

Gay men cruise bar and sex-on-premises venue Club 80 will be forced to relocate or close at the end of its tenancy – after the Collingwood buildings it has occupied for more than 20 years sold to an investor this week, within days of being advertised.

The incoming landlord plans to re purpose the holdings into swank offices after paying a price speculated to be close to $8 million.

With the deal, an expressions of interest campaign which
was set to close on November 20 has been cancelled.

The Collingwood properties sold for a speculated price close to $8 million – enough for the vendor to cancel an expressions of interest campaign which was scheduled to close on November 20.

The properties include:

  • a triple storey Art Deco replica, built in the 1970s,
    at 8 Peel Street, with 247 sqm of internal area and a crossover, and
  • A three-storey Art Deco brick warehouse with 1038
    sqm of space at 10 Peel Street, opposite the near-new Peel Street Park.

When the Club 80 sites hit the market, they carried a combined guide price of about $7.5 million – valuing the land at about $18,000 per sqm – a suburb watermark, according to local agency sources.

The actual sale price could value the land closer to
$19,000 per sqm.

Marketing agents, Knight Frank’s Danny Clark, Andrew Hansen and Jack De Lutis with GrayJohnson’s Rory White, Matt Hoath and Brett Simpson, declined to comment about any part of their deal when contacted.

The buildings are currently fit out with bars, lounges, private rooms and dungeon-themed social spaces.

Club 80 at 8 and 10 Peel Street will be refurbished into offices

Covering 417 square metres, any incoming owner could have
entertained a variety of new development outcomes for the Club 80 land including
apartments, an office, a hotel – or a combination of these.

Instead, the purchaser will refurbish the existing 1285 sqm of space into offices.

Collingwood, with Richmond/Cremorne, East Melbourne and
South Melbourne, command the highest commercial rents outside of the Melbourne
CBD and Southbank.

High character warehouse converted office space, like
that now proposed for 8 and 10 Peel Street, is the most sought after, with
occupiers regularly known to pay more than $600 per sqm, per annum.

In April we reported about Sony Music was paying more than $500 per sqm, per annum, for its new headquarters, a graffiti-covered former factory with bars on the window, opposite the Richmond train station (pictured, below).

Sony Music recently paid top dollar to lease this warehouse converted A-grade office opposite Richmond train station as its local headquarters.

Sex sells…increasingly in Melbourne, to property developers

The Club 80 Peel Street sites aren’t the first licensed for
sex to pique the interest of developers and investors recently.

In 2017 developer Crema Group paid about $15 million for
the double-storey South Melbourne building which for 30 years prior accommodated
brothel The Pink Palace. This site, 8-16 Palmerston Crescent, is
now making way for an 18-storey apartment tower
, The Eighth.

Three years ago, private developer Tony Huang paid $12.66
million for Elsternwick parlour The Daily Planet – and two neighbouring
buildings – a deal which valued the land at $10,200 per sqm, reportedly a
record for the suburb.

Former city gay sauna Steamworks, at 279-291 La Trobe
Street, which closed in 2008, was later acquired by the Coptic Orthodox Church and
recently rebuilt as Eporo Tower, a cathedral with upper level apartments.

In September we
reported
that the operator of nightclub Lounge, which closed
at 243 Swanston Street after 29 years
, rented Carlton’s former Hellfire
Club S&M venue, to reopen as a hospitality venture which will trade 24
hours a day.

Longer term it is expected developers will build into the
airspace of the ex-Hellfire properties in Queensberry Street.

Collingwood blue collar continuing to make way for white

Two months ago, Pace
Development Group listed for sale
an 11-level office under construction on
a compact 510 sqm block, formerly occupied by a low-rise brick factory, at 51 Langridge
Street.

Just prior, we
reported
about a warehouse-converted-office with development upside at 4-12
Langridge Street which sold for $3.5 million, pricing every square metre of the
Commercial 1 zoned land at $9500.

The director of apartment builder Domain Hill Property
Group, Peter Cahill, has been recently selling down adjoining Collingwood industrial
sites as residential development plays, banking a total of more than $20 million,
according to sources.

In August we
reported
that Landream – which is proposing a
distinctive Zaha Hadid Architects penned hotel
in the city – was buying 40
and 50 Rokeby Street from Mr Cahill, following an Emmetts campaign.

Earlier this month, the developer offloaded sites known
as 60 and 70 Rokeby Street following another
campaign
targeting other builders.

Four months ago, design house Bar Studio, which is based
in the city’s Flinders Lane, outmuscled investors to
acquire the red brick warehouse at 47 Easey Street
part-occupied for 20
years by alternative radio station PBS.

Bar Studio plans to owner-occupy the double-storey Collingwood
building which cost $6.85 million.

In 2017, the record price for an established home in the suburb was set when a church-converted residence at 6 Oxford Street traded for $6.1 million.

A church converted residence became Colllingwood’s most expensive home sale when it traded for $6.1 million in 2017.

Collingwood rising

Like many Melbourne suburbs, Collingwood will soon be distinguished
by a substantial skyline of mid-rise buildings.

The Liberman family backed Impact Investment Group is developing
a 12-storey office in the area: The Northumberland,
at 54 Wellington Street, is expected to have an end value of $111 million upon
completion. Cosmetics giant AESOP will occupy three floors of the 15,109 sqm complex,
set to open next year.

Tim Gurner has a couple of active Collingwood projects: a
unique, rectangle site at 1-57 Wellington Street is earmarked to become a series
of mid-rise apartment buildings, the highest about 11 floors, within a village being
marketed as Victoria and Vine.

Mr Gurner is also constructing a 12-storey mixed-use project
at 23-33 Johnston Street – in
May committing Sydney-based Veriu
to occupy the 95-key hotel component.

In April, US-based Hines, one of the world’s largest
privately owned real estate investment groups, paid
Manfax Hardware and Paint owner Robert Larsson $28.5 million
for a 2120 sqm
site covering 36-52 Wellington Street.

Hines plans to replace the block with Australia’s first
timber tower – the height of which is yet unknown (while Mr
Larsson went on to buy
an unrenovated Collingwood office, 22-24
Northumberland Road, off market, for $7.35 million).

Last year, Zhang Weian’s V-Land paid $40 million for the
former Glo-Weave Shirt factory on 4287 sqm at 128-144 Wellington Street, a site
expected now to be replaced with several major structures.

Peregrine Projects, controlled by accountant Joseph Chahin,
is also in the pocket: building an eight storey office in at 64-88
Langridge Street
.

Mr Chahin sold a neighbouring parcel (60-62 Langridge Street) to Sydney-based Tribe Hotel Group which plans to redevelop it as its flagship inn.

Cosmetics giant AESOP has committed to three floors of the Liberman family’s 12-level Northumberland office, under construction at 54 Wellington Street, Collingwood.

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