The complex of six units at 51 Bruce St, Toorak, has sold for more $8m, after neighbouring home owners teamed up.
A group of one-bedroom unit owners have each scored a more than $1m windfall after teaming up to offload their homes to a developer for a whopping $8m.
And the agents who brokered the deal have revealed it probably couldn’t have happened without the Victorian government making a range of changes to the state’s planning regimes.
Incredibly, the Toorak site is set to be developed for a second time around after being built as a series of one-bedroom units in the 1950s.
The unit owners are a mix of somewhat savvy property owners who understood the more than 1000sq m site on Bruce St could be more valuable if it was sold to a developer.
RELATED: Labor’s reserve price plan ‘traps’ Victorian sellers
Block judge slams Victoria’s tax ‘failure’
Geelong ‘sky home’ has bird’s eye bay view
A local Chinese developer agreed, offering $8m for the complex and the prospect of building luxury new homes in its place.
The mostly dated mix of one-bedroom residences on a large overall site fit into a segment of Melbourne’s unit market that is becoming more valuable for redevelopment than as individual homes.
Sales records show the most recent sale of any of the homes individually was when unit one sold for $636,000 in 2019.
One of the homes, No. 2, hadn’t changed hands since 1979 when the owner paid just $32,000 for it.
A render showing what the future of the complex could look like.
2/.51 Bruce St, Toorak, hasn’t been sold since the 1970s, but was advertised for rent in recent years.
Cushman and Wakefield’s Greg Davies and Leon Ma brokered the deal, and indicated each owner was likely 25-50 per cent better off than they would have been.
“There were six different unit owners who came together after the understanding that the property was worth more as a development site than as a bunch of units,” Mr Davies said.
“A few of the owners are pretty experienced and savvy in the property space and it was the thoughts of a couple of them, and they got the rest on board.”
The agent said while there was an agreement around how the $8m would be divvied up among the owners, he wasn’t sure of the particulars.
However, he did estimate the uplift was anywhere from 25-50 per cent in sales value, which would mean anywhere from $2m to $4m of the sale would be split among the owners.
Done evenly, six ways, that results in a figure from $333,000 to $666,000 as a bonus for each owner.
No. 5 was the most recently sold home of the group, transacted in 2019.
The complex is set on a 1000sq m allotment.
Beyond coming to that arrangement, he said it would have otherwise been a simple process for the group of owners — and each would have made a six-figure gain on what they would have got if they had tried to sell solo.
His colleague, Mr Ma added that the list of properties that fit the bill for such a deal was limited, with perhaps as few as three or four transacting in similar circumstances a year, but the ability to lock in sales had improved as a result of recent planning changes for the state.
“But the (Victorian government’s) new building rules have helped this along,” Mr Ma said.
“I wouldn’t think they would have been able to do this a year ago.
“So there’s a definite value uplift for these homes. But only if the owners are across the market.”
Even buildings with the right mix of homes in sought-after suburbs, Mr Ma said they still had to be in just the right spot.
Some of the residences, like No. 1, had more modern kitchens.
Other kitchens, like the one at No. 5, were more functional.
“This is an exceptionally well‑located site with strong fundamentals, wide frontage, excellent walkability to Toorak Village, and a resident demographic that supports high‑end, boutique development,” Mr Ma said.
It is understood there were a handful of other parties who missed out on the purchase, suggesting there is still demand for more.
“What we’re seeing in Toorak is a deep pool of both local and interstate capital chasing opportunities that are extremely limited in supply,” Mr Davies said.
This was, in part, due to premium apartment projects achievable in affluent areas attracting stronger sales interest than more affordable options, he said.
Mr Davies added that they had done several amalgamation sales in recent years, including a series of strata properties at 1111 High St, Armadale, last year.
While spacious for one-bedroom homes, it’s likely the site will be replaced by a luxury new complex.
While workable by 1950s standards, the bedrooms in the addresses near future are likely to be a bit more impressive.
That deal took about 12-18 months to come together, but also landed the owners a premium.
However, he said such sales were still very much opportunistic — and not likely to be replicated at a widespread level.
“It is often difficult to get everyone on-board,” Mr Davies said.
“But, when you have like-minded and commercially-minded owners who see the benefits in doing so, that’s when you see it coming off.”
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: How Melb dad dodged $200k moving hit
English (US) · 