Melbourne-based property developer Tim Gurner reveals plans to boost his pipeline of build-to-sell apartments with an $800 million luxury project on the fringes of Melbourne’s CBD.
Gurner’s company, Gurner Group plans to build up to 180 residences at 424-426 St Kilda Road, which the company recently acquired for around $80 million.
The 4651 square-metre St Kilda site – currently a six-storey office site called Illoura House – is understood to be the second seed asset for Gurner’s build-to-sell fund, to which Singapore sovereign wealth fund GIC has committed an estimated $400 million.
It’s understood that Gurner acquired the blue-chip site via an off-market negotiation handled by JLL’s Josh Rutman & Mingxuan Li and CBRE’s Kiran Pillai and Tom Ryan in late 2022.
Gurner is in no hurry
Given that Illoura House complex currently has long-term tenants, Gurner plans to see those leases out before demolishing the building and moving forward with this as-yet-unnamed luxury apartment project.
What has clearly attracted Gurner to the St Kilda site, which has been on his radar for over 10 years, is the site’s three frontages on the corner of St Kilda Road, Toorak Road and Queens Lane with views across Albert Park and the Royal Botanic Gardens.
On completion, the project will offer walkability to Anzac Station, Albert Park Lake, the Royal Botanic Gardens and Fawkner Park, and be in easy proximity to South Yarra’s retail and dining precinct.
Gurner Group plans to submit a new planning scheme to replace the site’s lapsed permit, which allowed for an 18-storey building with 339 apartments and 292 car spaces.
St Kilda Road project to resemble St Mortiz
The St Kilda project is expected to resemble Gurner’s high-end development, St Moritz, which overlooks the sea at nearby St Kilda.
“I have had my eye on this particular site for over a decade, having cut my teeth with Morry Schwartz on 401 St Kilda Road in 2008 across the road so it’s humbling to be able to come full circle with another site now directly across the road some 15 years later, still with the same aspirations to create a new benchmark for residential design just as 401 did at the time,” said Gurner.
“We are excited to evolve and elevate this concept and take it even further with this project. With its prime iconic corner location it will become an iconic landmark for Melbourne so we cannot wait to do this site justice.”
Gurner is eyeballing additional acquisitions
While the St Kilda site is the company’s second acquisition in as many months, following the recent purchase of a significant site in 189 Kent Street, Sydney in July for over $200 million, Gurner Group is actively seeking more opportunities in Melbourne and Sydney.
“It’s a tough environment for developers and commercial asset owners currently, and the effects of interest rate hikes are still yet to really play out across valuations and interest covenants, so we do expect to see a continuing trend of office assets being put on the market at discounted 2022 prices.” Said Gurner Group chief development officer Robert Clarke.
Image: The 4651 square-metre St Kilda site will eventually be demolished to make way for up to 180 luxury residences.
