Capital Gain

QUEENSLAND-BASED property developer David Devine is wasting no time getting back into the Melbourne scene.

Four months since retiring from the development company he established in 1983 now known as Devine Ltd Mr Devine's newest incarnation, Metro Property Development, has paid $10.2 million for an 8-hectare site in Doreen.

The land, at 60 Orchard Road, on the corner of Garden Road, will be subdivided into about 150 lots and carry an average block price of about $200,000. Assuming homes worth $250,000 are developed, the project could have an end value of close to $70 million.

Biggin Scott land director Frank Nagle marketed the Doreen land, but declined to comment on a deal. A Metro representative confirmed the purchase.

The parcel was marketed with a permit and is ready to be developed.

By choosing Doreen, Mr Devine (below) and Metro are pitching themselves against some of Australia's biggest residential developers including Devine Ltd, which once controlled a 43-hectare site in Doreen.

Delfin, Lend Lease and Stockland, from Sydney, and Perth-based Satterley Group are other big interstate developers in Doreen, which abuts South Morang, Nutfield, Arthurs Creek and Yan Yean.

Metro's Melbourne presence was boosted last October when it merged with Hartman Corporation, headed by former Devine national general manager Luke Hartman.

Mr Hartman is now chief executive of Metro, and operates from a St Kilda Road office. Mr Devine, as executive chairman, will be based at Metro's headquarters in Brisbane.

With a development pipeline predominantly including inner-city Brisbane apartment blocks, and suburban Melbourne residential development sites, Metro has set itself an annual goal to sell 800 flats, 1000 blocks of land and 500 homes, via a business association with Creation Homes.

Bourke Street history

THE grand city headquarters of bankrupt Melbourne lawyer Isaac Brott are to be sold.

In the same week Mr Brott pleaded guilty to four counts of misconduct, agents were appointed to sell Stawell Chambers, at 493-495 Little Bourke Street. The 121-year-old, four-level building is opposite the southern boundary of the Supreme Court. It includes 650 square metres of vacant office space.

If Stawell Chambers follows the direction of other similarly aged CBD offices, additional floors could be developed atop the historic facade.

A restaurant, boutique hotel, or three-level shop, have also been mooted for the site, which is about three blocks away from the Bourke Street Mall.

Savills directors Clinton Baxter and Nick Peden are expecting about $4 million when Stawell Chambers is auctioned next month.

Nanotech heaven

MELBOURNE's next unique office in this case to be configured as a laboratory and classrooms starts construction in Bundoora this month. La Trobe University's $93 million La Trobe Institute of Molecular Science will rise six levels from Science Road, at its campus 17 kilometres north of town. The biotechnology and nanotechnology education centre is due for completion late next year. Queensland developer Watpac won the contract to construct the Lyons Architect-designed building.

Germans want a break

GERMANY'S SachsenFonds is hoping to break even from the sale of an inner-city office it bought three years ago for $137 million $22 million over its then book value.

The 11-level glass office at 209 Kingsway, on the south-east corner of Dorcas Street, is built on the site of the South Melbourne tram depot.

Private investor Clement Lee bought the tram depot site from the Kennett government in 1997 for $18 million.

The day after settlement, he famously sold a portion to residential developer Central Equity for $18 million. The 9632-square-metre balance was sold to Multiplex for $20 million.

A nondescript 24,635-square-metre A-grade office was developed on the Multiplex portion, but the property is perhaps best recognised by its ground-floor car dealership tenants: BMW and Mini Cooper.

The property was later owned by Investa, which in early 2008, at the start of the economic downturn, sold it to SachsenFonds, a subsidiary of the Frankfurt-based KanAm Group and its funds. The building was sold for $137 million, on a yield of 6.5 per cent, despite having a book value of $115 million.

In what is bad news for the sole office tenant, ANZ Bank, marketing agency Colliers International describes 209 Kingsway as "underlet" and with scope for rental growth.

Nick Rathgeber, John Marasco and Leigh Melbourne are marketing the building for SachsenFonds.

Sprawl reaches Clyde

ADVANCE to Clyde-Five Ways Road, about 45 kilometres from town, if you want to know how far Melbourne's south-east suburbs have sprawled and will soon overrun.

A swag of farms and major homestead estates listed last year for sale along the soon-to-be-major road, sold over the festive break.

The "farm sale" trend is not new to the south-east, where large parcels are also selling around Langwarrin, Pearcedale and Skye.

Since significant changes to the urban growth boundary last year, farm sales to developers have quietly and rampantly gone ahead to the north and west of town, too.

The trend is convenient for new Planning Minister Matthew Guy, who is trying to curb high-density redevelopment in the suburbs by opening up tracts of land in outer areas (restricted from redevelopment by the former Labor government).

But new Minister for Roads and Public Transport Terry Mulder will have to hit the floor running with housing estates recently opening before infrastructure was ready, producing congestion on outer-suburban roads.

In the most recent sale, local builder Dennis Family Homes has bought a 48-hectare site in Clyde North.

Executive chairman Grant Dennis told Capital Gain the builder was planning beyond the completion of its Hunt Club project in nearby Cranbourne East, which has been developed in stages since 1996.

The Clyde North land parcel will yield about 600 lots, and be developed in stages from about 2015 till 2021.

The parcel, which was being marketed by Colliers International, was recently included within the urban growth boundary.

Industry sources say that based on current land values, and terms of settlement, Dennis Family paid about $30 million for the entire site, though this could not be confirmed with the developer.

The City of Casey council still needs to approve a precinct structure plan for the area adjacent to and surrounding the Dennis family's Clyde North site.

That process is expected to identify locations for retail, commercial and other major services.

Bayside health

AT LEAST the health of Melbourne's building sector is strong. With the Hampton Rehabilitation Hospital almost fully redeveloped as a ritzy apartment complex, another two recently closed nursing centres have hit the market as bayside development sites.

Read Saturday Domain for more details about the two approximately 2500-square-metre parcels, in Brighton and Sandringham.

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