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SOUTH African real estate group Redefine Properties is planning to redevelop a car park complex on the edge of Melbourne's CBD into a student accommodation facility after snaring the Carlton site for $30 million.
Redefine, one of the largest property companies listed on the Johannesburg Stock Exchange, has laid plans for a $130 million complex of up to 700 beds for the property located at 16-32 Leicester Street.
The planned development will be owned by a real estate investment trust controlled by Redefine.
The existing property, located on a 2040sqm site, comprises 454 car parks across six levels.
According to Matt Stagg, who negotiated the sale along with Colliers International colleagues Daniel Wolman and Oliver Hay, the sale comes on the back of a surge in global interest in the student accommodation sector in Melbourne.
"The past 18 months has seen an influx of major international student accommodation groups buying up key sites between RMIT University and Melbourne University," says Stagg.
Colliers says the sale also comes on the heels of significant upgrades to existing campuses such as Melbourne University and RMIT University.
"Private education groups such as Melbourne Institute of Technology and Haileybury College have also made major investments in Melbourne CBD and city fringe campuses," says Wolman.
"That's why there is strong demand by international and local students for new high quality student accommodation facilities to be constructed within close proximity of these universities and schools."
While the planned development by Redefine Properties is seen as a positive, concerns have been raised over the dwindling supply of carparks in the Melbourne CBD.
A number of stand-alone carparks have been earmarked for demolition to make way for new residential developments.
Proposed on-street parking limits by Melbourne City Council are also adding to price pressures for motorists.
Colliers says this trend is boosting the returns and value of existing carparks.
Meanwhile, another carpark at 380 Queen Street, which was offered along with the Leicester Street property, could also change hands as negotiations with potential buyers continue.
The 3218sqm site, on the corner of Queen and A'Beckett streets, comprises a six-level car park with 556 bays and a 1917sqm ground-floor showroom and office.
"The car park at 380 Queen Street is in advanced negotiations with major developers and car park investors," says Colliers' Oliver Hay.
"The Queen Street car park is one of the largest remaining undeveloped landholdings in the Melbourne CBD."
He says there are plans by COX Architects for a 71-level tower for the site which has an asking price of $80 million.
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