Malaysia-based Mammoth Empire the latest Asian developer to take another piece of Melbourne residential development pie

Malaysian developer Mammoth Empire has secured a prime development opportunity in the northern fringe of Melbourne’s central business district, opposite a 55-storey residential tower it already has under construction.

The current low-rise 398-406 Elizabeth Street site was acquired from a Melbourne family for $15.1 million.

The 1,029-square-metre site on the corner of A’Beckett and Elizabeth streets is on the adjoining corner where the $250 million MY80 tower is under construction.

MY80 is a 55-level glass tower on the corner of Elizabeth and A'Beckett streets with plans for the architecturally striking, 173-metre high rise to have a private rooftop nightclub-bar and lounge on its 53rd floor (artist's impression above). Retail tenants in the single-storey building latest acquisition are delivering a low passing yield of a little less than 2%, hence the site was offered by CBRE agents Mark Wizel and Josh as one for residential redevelopment. Its sale price was one of the highest per square metre prices for CBD land in the past year.

Over the past few years, Malaysian, Singaporean and Chinese-based developers have snapped up $385 million of prime CBD residential sites in the Victorian capital, with sites including the Fulton Lane project, where Malaysian developer SP Setia is building 800 apartments at 151 Franklin Street.

Last month a Malaysian investor purchased the CBD corner occupied for 57 years by the clothes manufacturer and retailer Fletcher Jones.

The 1 Queen Street asset – a double-storey showroom on a 746-square-metre block at the north-west corner of Flinders Street – sold for $11 million to an investor who is expected to lease the existing asset but resell after a redevelopment permit has been obtained.

The Queen Street sale price reflected a land rate per square metre of $14,745 was pushed up by residential developers, in the mix of 11 that submitted formal offers for the property to Savills.

“We are fielding continued interest from offshore developers wanting to acquire large development sites in the Melbourne CBD,” Wizel says.

“Interest from publicly listed Malaysian development companies remains particularly strong, with active mainland Chinese developers not far behind.”

The property services company PDS Group, which is co-ordinating the MY80 project, also negotiated the latest deal for Mammoth, which was attracted by the precinct close to Melbourne’s universities.

It was never marketed for sale in Australia when the off-the-plan sales took place at the time when federal government foreign ownership legislation  by the Labor government allowed 100% ownership by offshore interests in new residential projects.

The site was the former car dealership, near Flagstaff Gardens.