A Collingwood landholding offered with vacant possession has sold unconditionally.

A local developer-landbanker bought the side by side office warehouses at 166 & 168-172 Johnston Street, which is on a 809 square metre parcel of Commercial 1 zoned land, off Hoddle Street, as capital continues to flow into Melbourne’s surging city fringe market.

166 and 168-172 Johnston Street, Collingwood was transacted by CBRE’s Nathan Mufale, Scott Hawthorne, David Minty & JJ Heng, which represented a new benchmark for a commercial site in that zone.

Mr Mufale said “The site recently underwent a re-zone and buyers gravitated towards the opportunity. There is a strong contingent of mixed-use developers vying for well located, medium to high density development sites.”

"Buyers continue to talk with their feet and demonstrate that they are confident in the long-term growth prospects for the Melbourne City Fringe office markets,” he continued.

Mr Hawthorne added “In the context of the current market risk factors and forecasts for where the market may be headed, to have received such a strong depth of offers for the property from a mix of developers is a strong sign.”

“It provides an indication that we may see a more positive market for the commercial sector in the near term than anyone would have dared forecast,’’ he said.

The listing comes following several high-profile recent transactions in the area including 15-17 Easey Street, Collingwood for around $7m and 30-44 Sackville Street, Collingwood that recently fetched $17m.

The next major city fringe opportunity is in the nearby high-density development pocket of West Melbourne.

372 Spencer Street, West Melbourne is near Flagstaff Gardens, between La Trobe and Batman Streets and will be marketed by CBRE’s Nathan Mufale, Scott Hawthorne, Alex Brierley and David Minty.

“Anytime we have an offering with such substantial existing improvements, we see strong interest from investors & occupiers from a variety of backgrounds, including charity organisations, professional services end education groups who continue to show strong appetite for buildings in and around the Melbourne CBD,” Mr Brierley said.

The north-western section of the city grid is currently going through a period of transformation as the Docklands waterfront & sporting precincts reach maturity, and the suburb of West Melbourne continues to gentrify with several residential projects either completed or under construction.

Developer Deague Group has recently completed a major twin tower residential project immediately opposite the property – dubbed Melbourne Village, the 28 and 22 level buildings comprise 529 residences, which have all been sold.

Similarly, Trenerry Property Group (backed by Victor Smorgon Group) completed the nearby $340 million West End development. The mixed-use project is on the former Australia Post exchange site in Rosslyn Street. The five-building project comprises apartments, serviced hotel, retail centre and a major office building, with the developer recently offloading the 99-room former Adina apartment hotel that forms part of the project for about $35 million.

The West Melbourne Structure Plan was recently finalised, guiding the future redevelopment of the area and paving the way for high density but sustainable living. Governed under the new Special Use Zone 6 and located in the Flagstaff Precinct, the new height planning controls encourage high density residential developments and create of a new central high street on Spencer Street, with 10,000sqm of new public open space in the area.

Under the plan, tram and priority bus services will be extended further north, with Spencer Street set to be rezoned as special use for the provision of more shops, cafes and restaurants.

Private and institutional investment groups continue to actively pursue properties in the immediate area, with a smaller building at 11-17 Jeffcott Street selling for $7.6 million (2.9% yield) and American build-to-rent giant Sentinel Real Estate Corporation buying the former Don Kyatt Automobiles warehouse in Roden Street.

To request a sales analysis please contact either of the selling agents CBRE’s Nathan Mufale, Scott Hawthorne, David Minty & JJ Heng, via the below contact details.