Australia

Cup winners finish $55m property trifecta

383 Spencer St, West Melbourne - for Herald Sun real estate

The recent sale of 383 Spencer St, West Melbourne completes a $55 million trifecta.

The final piece of a West Melbourne property portfolio part-owned by a pair of Melbourne Cup winning horse owners has been sold for $7 million.

The three-level office building at 383 Spencer St was sold to a private investor from Melbourne.

Resimax Group boss, and the first person to own horses that have won the Melbourne Cup and the Everest events, Aziz ‘Ozzie’ Kheir, and Phil Mehrten, the founder of Probuild and a connection to 2016 Melbourne Cup winner Almandin, sold the property alongside developer Frank Palazzo.

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Steve Hooker and Ozzie Kheir

Olympic gold medallist Steve Hooker and Ozzie Kheir on the roof at Kheir’s hotel, the Adelphi. Picture: Andrew Tauber

With the three sales totalling $55 million, the co-owners are understood to have collected an about $20 million windfall from their purchase in 2015.

The trio had planned to develop a hotel at the site, but changed their plans last year and progressed to a sales campaign early this year.

“Unfortunately our closing date was the day COVID-19 became a pandemic,” Kheir said.

“But we just thought, ‘we are aren’t desperate sellers but if it sells: great’.”

A two-level warehouse at 102-108 Jeffcott St sold for $9.5 million early in April to developer Blue Earth Group, while the seven-storey former home of Sands & McDougall printing at 355 Spencer St sold for $38.5 million later that same month to Alvari Capital.

102-108 Jeffcot St, West Melbourne - for herald sun real estate

The warehouse at 102-108 Jeffcot St, West Melbourne sold for $9.5 million in April.

355 Spencer St, West Melbourne - for herald sun real estate (1)

The former home of Sands & McDougall printing at 355 Spencer St, West Melbourne fetched $38.5 million.

“We got good, fair value, not far off what we thought we would have gotten pre-COVID,” Kheir said.

“We have probably made $21 million between us (including rent) over those few years, and that wasn’t anything to sneeze at.”

He’s now looking for properties to buy, particularly in the land estate market, but said there was no sense of panic-sellers.

And despite hesitance from house and land buyers to sign deals at the moment, even with the $25,000 HomeBuilder grants on offer from the federal government, Kheir’s Resimax Group had sold out two stages of its Eynesbury estate in the space of four weeks since COVID-19 hit.

It’s the first step towards expectations of a post-virus Melbourne where homebuyers will increasingly seek out homes offering lifestyle.

“A lot of companies will embrace working from home two or three days a week, so people are going to want to live based on lifestyle, not on how close they are to work,” he said.

CBRE senior director Josh Rutman said the succession of sales showed buyers remained active and interested in the market, despite COVID-19.

355 Spencer St, West Melbourne - for herald sun real estate (1)

An aerial view of 355 Spencer St, West Melbourne.

“Ultimately it hasn’t lead to the doomsday prices we might have expected,” Mr Rutman said.

“We have seen three different, experienced groups transact on properties that were attractive, though not AAA+.”

He said even a renewed lockdown in Melbourne had done little to shake confidence among buyers, with capital from Singapore, Malaysia and Hong Kong still eyeing Melbourne and Sydney with no sign they favoured either.

“The next six weeks, as bad as it is, will be seen as a blip,” Mr Rutman said.

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