Dodo founder to bring $140m office block to Fitzroy North
Dodo founder Larry Kestelman is planning to develop a $140 million, 10-storey office building in an inner northern suburb of Melbourne, hoping tenants will see the benefits of working near home instead of in the congested CBD.
An application has been lodged for a mixed-use building with a rooftop terrace that could include office space as well as ground floor retail such as a supermarket or coffee shops.
“Not everyone wants to work in the city,” Kestelman told The Australian.
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“My office is on Queens Rd (near South Yarra). It’s a great spot. I love it because I have lived most of my life in the southeastern suburbs. It allows me the benefit of being close to the city but not having to drive into the city every day.”
The new project’s site at 622 Nicholson St in Fitzroy North, currently home to the Moonlight Receptions function centre, is about 3km from the city centre.
“You don’t need to battle that last bit of traffic every morning. For people who live on the north side of the city I can certainly see the attraction,” he says.
The developer considered turning the block into apartments but decided on an office project, taking the view that there was not enough office space for tenants who wanted to be on the city fringe.
The Melbourne CBD office market is tight, with vacancy at just 4.6% according to recent Property Council figures.
Kestelman hopes to attract a large single tenant or main anchor tenant who would put their name on the building and have the option to customise design.
The project marks a departure for the developer, whose LK Property Group has focused largely on residential designs, with the exception of transforming its own head office with a renovation and adding more tenants.
He says the city’s apartment market was solid and any oversupply of affordable stock was coming to an end, with demand from renters set to rise.
The group’s flagship project is the $500 million Capitol Grand tower in South Yarra, where buyers can earn Qantas frequent flyer points on apartments purchased and Hollywood actor Charlize Theron was brand ambassador.
Close to 80% of the stock below level 32 is sold and the group is now launching some of the premium upper-level apartments, of which 35 to 40% had already sold, he says.
This article originally appeared on www.theaustralian.com.au/property.
