Melbourne car parks slated for monumental $110m sale

A pair of Melbourne CBD car parks valued at an estimated $110 million are to be sold as part of a portfolio being touted as the biggest in more than a decade.

The car parks at 380-406 Queen Street, Melbourne, and 16-32 Leicester Street, Carlton, are home to more than 1000 individual bays, putting the potential price tag beyond $100,000 per bay, and will be sold via an expressions of interest campaign.

The news comes after a Colliers International research report earlier this year found that a lack of new CBD car parks and the destruction of old ones to make way for residential developments was making them a rare and extremely tightly held commodity.

It is the biggest car park portfolio to be offered for sale in the Melbourne CBD for more than 10 years

According to the report, there are almost 300,000 workers in Melbourne’s CBD but only about 41,000 car parking bays. Sydney’s CBD has about 240,000 workers and less than 30,000 bays.

The two car parks are to be sold via expressions of interest, closing on October 8.

The Melbourne car park, on the corner of Queen and A’Beckett streets, is spread over a 3218sqm site that comprises a six-level commercial car park with 556 bays and a 1917sqm ground floor showroom and office. The Carlton car park also rises six levels and has 454 bays on the 2040sqm site.

Colliers International has been appointed to sell the properties, with each car park tipped to fetch about $70 million and $40 million, respectively.

If the properties achieve those prices, they would dwarf the results achieved for similar properties in the past two years.

An eight-level, 706-space car park at 20-28 La Trobe St sold to a local investor for $17.6 million late last year – a rate of $27,787 per bay – while a 300 Flinders St car park with 574 bays reached $40 million in January 2014 – almost $70,000 per bay.

This six-level car park in Carlton is tipped to sell for $40 million

Colliers International’s Matt Stagg says it is the timing of the sale that is expected to push the combined price beyond $100 million.

“It is the biggest car park portfolio to be offered for sale in the Melbourne CBD for more than 10 years,” Stagg says.

“On its own, this portfolio is substantial and unique, but current market conditions elevate the offering to an unprecedented level.”

Commercial car parks are a rare and highly prized investment that provide excellent cash flow

Stagg echoed the Colliers report, saying a chronic lack of parking in Melbourne’s CBD made car parks an increasingly popular investment.

“The sale of the two properties comes at a time when the number of purpose-built commercial car parks throughout the Melbourne CBD and city fringe is rapidly reducing,” he says.

“A number of parking facilities have recently been or are scheduled to be demolished to make way for new residential and commercial developments.”

“Combined with a proposal by Melbourne City Council to limit on-street parking, this has seen the cost of car parking dramatically increase in recent years. Therefore, commercial car parks are a rare and highly prized investment that provide excellent cashflow.”