St Kilda apartment owners band together and cash in

A “daggy” St Kilda apartment block has sold for about $11.5 million, earning the owners of its 21 flats substantial windfalls.

The one-bedroom apartments were valued at $270,000 individually. But they ended up achieving about $530,000 each, Motion Property selling agent Ariel Brukarz says.

“We always pitched it to (the owners) that they would double the value of their units,” Brukarz says.

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“There are issues with the building — it could almost fall apart any day.

The 1960s block sold to a developer. Picture: Tony Gough

“So there was extreme positivity among the owners (after the sale).”

The owners’ payday was made even more remarkable by the fact some of them paid as little as $59,900, $61,250 and $68,000 for their apartments in the ‘80s and ‘90s, according to CoreLogic records.

Brukarz says a local developer from Melbourne’s southeast snapped up the three-storey 1960s block on a 1070sqm block at 14 Alma Rd.

The buyer plans to demolish the property on the corner of St Kilda Rd, to build a mixed commercial and residential complex in its place.

The agent expects that building to stretch to a height comparable with neighbouring 14- to 15-storey high rises.

The three-storey building contains 21 one-bedroom units.

He and his father Jack spent nine months signing up the block’s 20 occupants for the sale.

They included residents, one of whom had lived there 33 years, and investors from across Melbourne, the Surf Coast, Sydney and even America. One of them owned two flats.

Brukarz says getting the deal done “didn’t come without its challenges”.

“Every owner needs to approve the sale, otherwise it can’t go ahead (whereas) in New South Wales, you can push through a transaction with only 75 per cent of the owners’ approval,” he says.

“But even in a challenging market, with the downturn in property prices, we were still able to get a favourable result.

The block had dodgy plumbing, and was described by one of its residents as “daggy”. Picture: Tony Gough

“It shows the demand for inner-suburban high rise sites.”

One of the vendors, Rudie Chapman, previously told the Herald Sun signing up to sell her home of three years was a “no-brainer”.

“It’s a pretty daggy old building made in the ‘60s, with plumbing issues,” she said.

Another, Brent Orr, says he couldn’t turn down a chance to make three times the $165,000 he paid for his ground-floor apartment. He’d held it as an investment.

The property hit the market in September with price expectations of about $12 million, but Brukarz says that turned out to be “a little bit high when the market came off”.

This article from the Herald Sun originally appeared as “St Kilda unit block sells to developer for about $11.5 million”.