In trouble
The St Kilda Road office precinct has been in trouble for years, with vacancy rates rising steadily. They are now just shy of 30 per cent, according to the latest Property Council of Australia office report.
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Values along the strip have crash-landed, with many buyers who purchased in better times selling at steep discounts. Everland didn’t have much luck, but nor did many others who bought in the pre-Covid boom period and tried to sell after the music stopped.
Many of the boulevard’s offices, as well as others in Queens Road nearby, are likely to be repurposed as residential developments.
Everland also bought an art deco apartment complex at 596 St Kilda Road for $34 million in 2017 and sold it for $25 million in 2020. The same complex is for sale again with a price expected in the high $20 millions through Savills.
Further along the tree-lined boulevard, fund manager Bayley Stuart picked up Australian Unity’s 468 St Kilda Road for $42.55. Its book value was $63 million.
And developer John Marro has paid $28 million for No.432 which Scottish fund manager abrdn bought for $41.6 million in 2014.
The Mars Group has just relisted 420 St Kilda Road for around $50 million. The Hong Kong-based company paid $98 million for the 10-storey building in 2019. In 2023, the company listed it for $85 million, but there were no bites.
The 10,435 sq m building is 80 per cent leased with a 2.5 year average lease term, earning nearly $6 million a year.
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Knight Frank’s Trent Preece, Tom Ryan and Alice Crowley and JLL’s Tim Carr, MingXuan Li and Josh Rutman have the listing.
Reports lodged by various administrators and liquidators for the Everland Global network of companies make for sober reading.
Everland director Michael Xie told liquidator Glen Kanevsky the company had stopped operating in May 2023 and blamed COVID-19 and “a shortage of investor funding for cash flow issues.”
The sole secured creditors to parent company Everland Global – Hung-Chang Lee and Wen-Chin Chang – claim they are owed $55.5 million against loans extended to Everland Queens Road, the company which owned the tower.
However, it had no assets and a mere $32 in the bank. Kanevsky said there wasn’t even enough money to pay his bills let alone pursue others. Its chief creditor, the Taipei-based First Commercial Bank, declined to record its debt publicly in case it undermined the value of the property.
Directors Xie and Tim Chang claimed to be owed $552,000 and $15.61 million respectively, according to one of the Everland Queens Road reports lodged with the Australian Securities and Investments Commission.
Morry’s dilemma
Publisher and property developer Morry Schwartz has given up plans to build his headquarters on the old British Crown Hotel on Smith Street.
Schwartz told Capital Gain he had twice attempted to get a permit for an eight-level timber office building “but couldn’t get it. So it’s extraneous to my needs”.
“It’s a great location. You could make a major pub out of it,” he said.
Schwartz, publisher of The Saturday Paper, The Monthly and Black Inc Books, bought the pub in 2019 for $5.66 million.
The pub is on a 555 sq m site on the corner of Mason Street and holds a 1am liquor license.
Cushman & Wakefield’s Daniel Wolman, Anthony Kirwan and Raphael Favas have the listing and are expecting around $5 million.
It’s not the only pub up for sale in the neighbourhood. The Baden Powell Hotel around the corner at 61-65 Victoria Parade – currently trading as the Continuum Hotel – is also on the market.
The Continuum boasts a glittering fit-inducing fit-out “where heritage meets electric” and a 3am liquor licence. It’s on a 509 sq m site on the corner of Cambridge Street and has a flexible lease which includes a demolition clause.
Agents Brendan Burmistrow and Michael Ryan, principals of newish agency iDeal Commercial, have the listing and are expecting offers of around $6 million.
Victorian villa
The former St Kilda home of Geoffrey Satchell’s media production house Editel is up for grabs.
Expansive post-production studios were built behind a Victorian villa in 1999 and became the place where Kath & Kim and a host of lifestyle and game shows, and advertisements were prepared for broadcast after filming.
The property includes six edit suites and sound recording studios, a client lounge and bar, and a separate two-level apartment.
Stonebridge agents Dylan Kilner, Max Warren and Chao Zhang are handling the sale and expect around $10 million. After 25 years on Wellington Street, Editel is off to a new base in Port Melbourne.
Little Lon
A former hotel in the historic Little Lon red-light district is up for sale. Records show nightclub co-owner Monika Ippolito paid $1.71 million for the three-storey Leitrim Hotel at 128-130 Little Lonsdale Street in February 2008.
Ippolito and husband Camillo Ippolito have been the force behind a swag of Melbourne nightclubs and restaurants in the past 35 years, including Revolver Upstairs and The Toff in Town. Camillo Ippolito was a mainstay of the Melbourne nightclub scene in the 1980s, running Inflation and Sub-Terrain.
The Little Lon property has a ground floor office with a two-bedroom apartment upstairs. It was renovated 10 years ago and boasts a courtyard and a car space.
There’s less of the red light in the area in the 21st century. Across the road, Charter Hall has turned the Wesley Church into a swanky office building and construction is well under way on Perri Projects and Pellicano’s Bennett’s Lane building.
Cushman & Wakefield’s Kirwan, Hay and George Davies have the listing and are expecting between $4-4.4 million.
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