Oreana Property Group is paying c$35 million for a South Yarra retail and office complex with plans for a luxury hotel.
South Yarra Square, at 177 Toorak Road, was sold following an off-market deal by Emmetts’ Charles Emmett.
The property was once co-held by the Hubay and Kornhauser families.
It contains two Victorian villas and a five storey commercial building – all up 1691 square metres of lettable area.
The site spreads 1853 sqm, also with a European style public piazza and 24 car parks.
South Yarra Square neighbours a row of four double storey retail properties – 169-175 Toorak Rd – which was listed last month, also by Emmetts.
A precinct with enormous potential: buyer
Oreana, led by brothers Steven and Tony Sass, is proposing a luxury hotel, offices, wellness centre and retail, including restaurant spaces.
“The purchase represents a unique opportunity to develop an iconic landmark in one of Melbourne’s most sought after locations,” Steven Sass said.
“We’ve long held the view that this part of Toorak Rd offers enormous potential,” he added.
“We’ve seen the emergence of this in recent years with several larger scale projects transitioning the precinct from predominantly shopping and entertainment to also being a…business and accommodation precinct in its own right.
“Our vision for the site is to create iconic hospitality, office and retail facilities which are world class but which are uniquely South Yarra and Melbourne at heart.
“Planning and design has commenced and we anticipate applying for development approvals in the second half of 2021” (story continues below).
Oreana, with offices in Melbourne and Hong Kong, holds a diversified portfolio also with childcare, service stations and low and medium density residential.
When the whole is greater than the sum of its parts
South Yarra Square was subdivided into 11 lots in 1996.
Mr Emmett said it can be incredibly challenging to reach simultaneous agreement for all interests within a strata development to sell.
“It is a credit to the lot owners in this instance who ultimately came together,” he added.
“As prime inner city developable land becomes more scarce, we expect to see more strata developments like this being sold in one line.
“A lot of older strata developments occupy significant landholdings.
“As planning policies have evolved to facilitate more density in height in many inner-city locations, the economics of selling as a united group really start to stack up”.
One such example took place in 2019, when the owners of 21 studio apartments within a St Kilda block sold the property to a developer for $11m.
The deal priced each dwelling at $530,000 – or twice what would have been achieved had the owners not banded.
Also two years ago, in central Box Hill – regarded Melbourne’s second city given its skyline – the owners of eight villa units divested their 2061 sqm holding for $14.1m – valuing every residence at $1.76m (the area’s current median unit value is $560,000).