PM's leading man moves fast on tower proposal

Prime Minister Julia Gillard's beau, a former hair products salesman, has been employed by development company Ubertas as a contractor since November.

Ubertas is proposing to replace law firm Holding Redlich's low-rise office at 330-360 William Street with a 38-level apartment tower, destined to become a landmark near the Queen Victoria Market and Flagstaff Gardens.

Marketing of apartments within the Art on the Park project began recently, despite the absence of approval by Planning Minister Justin Madden or the Melbourne City Council.

A government spokesman said the proposal also has not been endorsed by a new independent taskforce the Central City Planning Committee established to review proposals, before being handed to the minister.

Art on the Park is the third major residential project exposed by The Age recently, in which marketing of apartments has started despite government planners apparently still being in consultative and decision-making stages.

Listed Hong Kong-based developer Far East Consortium is marketing the Upper West Side project in town, despite its application for the 2500-unit complex not yet receiving a tick. In St Kilda, a Fitzroy Street apartment project is also seeking registrations of interest, despite lack of approval.

The precinct around the Queen Victoria Market has become a hot spot for foreign investors and residents in recent years.

Despite the federal government recently modifying foreign real estate ownership regulations it introduced in 2008, it retained a controversial change allowing foreign investors to buy 100 per cent of apartments in a complex off the plan.

A developer of a major project next to Ubertas's project told Capital Gain almost all apartments it put to the market recently in a major development could have sold to overseas, mostly Asia-based investors, had it allowed.

The former Liberal government limited to 50 per cent foreign ownership of apartments sold "off the plan" within new complexes.

Time for rethink?

IS IT time to reverse regulations allowing foreign buyers to snap up entire Melbourne apartment blocks?

Buyers advocate Karin Mackay said the 2008 changes were contributing to a continuing situation whereby Asian investors, in particular, were paying between 25 and 50 per cent more for an "off the plan" apartment than what it would be worth, on the day of signing a contract.

"They still think Melbourne apartments are a bargain compared to the prices in their own country," said Ms Mackay, adding that most buyers use apartments as investments, cashing in on the rental crisis.

Since last year, the number of overseas-based builders swooping on prominent sites that will yield big apartment projects has increased sharply.

Talks on Brighton hotel

A CHINA-BASED investor is believed to be in advanced negotiations to buy a prominent hotel opposite the Royal Brighton Yacht Club.

Source say the as-yet-undisclosed group is paying about $20 million for the Quest Brighton on the Bay complex at 250 The Esplanade.

The hotel includes 59 serviced apartments, leased to the Quest hotel chain for 10 years with options. It also includes retail tenants, configured as a restaurant and luxury spa resort, and an office component.

It also includes three penthouses offered with vacant possession that the new owners can use as they wish.

Icon Property director Robert Mitchelson confirmed a sale for the property was being negotiated, but declined to comment on details.

Development sites sold to Asia-based developers in recent months include the former St Kilda Post Office; a site opposite the Shrine of Remembrance in Albert Road, South Melbourne; a site opposite Doncaster Shoppingtown; and major sites at the top of the CBD, in Mackenzie and Franklin streets, including one previously owned by billionaire Solomon Lew.

Mansion to fall

ANOTHER historic home in the St Kilda Road precinct is to be demolished.

A consortium including Macquarie Real Estate Capital is set to replace the Avalon mansion, opposite Albert Park Lake, with a 12-level, 161-unit complex.

Apartments within the development, Proximity on Queens, were put to the market recently. The plan replaces an earlier proposal to build 91 units in the 12-level structure.

Proximity will replace the 107-year old mansion, one of the few remaining homes designed by architect William Pitt, whose other local projects include the Princes Theatre and Olderfleet buildings in town, and the Denton Mills Hat building, now a residential warehouse conversion, in Abbotsford.

The Victorian Civil and Administrative Tribunal granted a permit to demolish Avalon.

Macquarie's $7.7 million purchase of the site at the peak of the market in late 2007 set a record rate of $3300 per square metre of land along the lakefront strip.

Sources estimate the 2323-square-metre site would be worth between $6.5 million and $8 million, were it put to the market today.

Queens Road runs parallel to St Kilda Road, becoming Kings Way to the north, and Dandenong Road to the south.

Five months after Macquarie bought the Avalon site, it paid about $26.25 million for a neighbouring office at No. 71. Purchased as an investment, it offers residential redevelopment potential.

Next door, to the other side, at No. 69, the state government recently redeveloped the former John Batman Hotel into a public housing block.

Elsewhere in the area, residential projects that incorporated historic homes into high-rise redevelopments are in Queens Road at 55 and 83, and in St Kilda Road, at 452, 473 and 572.

Plans are also being revisited, sources say, to redevelop the former Suntory restaurant at 74 Queens Road with an apartment complex.

Salvos strike when hot

TWO south-eastern-suburb development sites, which were once in the middle of nowhere but are now at the centre of everything, have sold for $1.92 million, reaping vendor the Salvation Army a capital gain of more than 100 per cent in almost five years.

The two sites, on almost identically sized blocks of just over 4000 square metres, sold to two owner-occupiers, who will build private homes on the sites.

The properties are about 27 kilometres from the city, near the suburb border of Knoxfield and the Ferntree Gully Road exit of EastLink.

Land values in the outer-east and south-east have been steadily increasing since the EastLink tollway was announced.

The Caribbean Gardens business park is nearby, as is the former Austral Bricks quarry, which was bought by Sydney-based developer Mirvac for $100 million in 2007. It is to make way for a mixed-use village estimated to be worth more than $1 billion on completion.

LJ Hooker's Craig Kelly and Stan Makantasis marketed the Rowville site for the Salvation Army. The charity group paid just under $800,000 for the asset in late 2005.

"We had inquiries from more than 100 people including church groups, owner-occupiers and developers," the agents said. "The Rowville market is piping hot this winter. The final price is another record-breaking result for the area."

Caravans hit the road

ANOTHER Victorian caravan park has hit the market as a development site, this time in Flinders. Read Domain today for the details.

marcpallisco@gmail.com