Greyhound Hotel latest Melbourne apartment target
By Vanessa Cavasinni, editor Australian Hotelier
The site of the demolished Greyhound Hotel in St Kilda has been sold to a prominent local developer and will be turned into apartments.
Property developer Nicholas Smedley has purchased the site for $7.5 million from owners Chris and Will van der Linden, and Karina Harcourt. The trio purchased the hotel for $2.1 million in 2006. The sale to Smedley was brokered by Clinton Baxter, Jesse Radisich and Nick Peden of Savills Australia.
The Greyhound Hotel, which was a hub for Melbourne’s LGBTQI community, was closed in January after the business was declared insolvent. With interest from many residential developers, the local community and council lobbied to give the building the protection of heritage status. The request was denied by the Victorian Civil and Administrative Tribunal and the pub was demolished.
Smedley purchased the 911sqm corner block with an approved permit for a seven-storey mixed-use building comprising 37 apartments and two retail spaces. The sale price represents a land rate of $8,200 per sqm and $200,000 per unit. Baxter notes that those rates are quite high for the area, reflecting the demand for development sites close to the city.
Priced out of the market
A few pubs in Melbourne have been demolished to make way for apartments of late, including the London Hotel in Port Melbourne. Most controversially the Corkman Irish Pub in Carlton was razed illegally by its new developer owners.
In fact, Baxter suggests that it is an increasing trend for older pubs where the surrounding suburbs have become established and the demand for more residential options continues to grow.
“The hotel market is shifting and many hotels are located in prime positions. They are often corner properties with large landholdings in established inner suburbs, where they can be high-density residential. So it certainly is a trend.”
Baxter also told Australian Hotelier that not only is there a demand for apartments, but that hotel operators are being priced out of the Melbourne market, with no offers made from hoteliers on the Greyhound Hotel site.
“Land values have skyrocketed, and that puts pressure on the hotel industry in that land tax is becoming a major cost burden on businesses. Particularly for businesses that are not at the forefront of profitability and patronage, then they can struggle in the face of higher costs, one of which is significantly land tax.”
Australian Hotelier reached out to AHA Vic for comment on this growing issue for the Melbourne market, but the association had not responded by the time of publication.