Victoria Police’s former city headquarters has sold for $58 million to an offshore buyer, which is now poised to develop $1.3 billion worth of projects in Australia.

Malaysia developer UEM Sunrise plans to develop 412 St Kilda Road into ultra-luxurious residences with a mix of ground-floor retail and serviced apartments. It is expected to appeal to buyers in the upper-income bracket because of its proximity to Melbourne Grammar and uninterrupted views of the Royal Botanical Gardens and Albert Park Lake. 

The property giant says Melbourne and Sydney have proved to be mature, stable markets that hold the potential for further growth. 

A mystery Singaporean investor paid $7 million for an entire level of penthouse apartments in the Conservatory within 72 hours of the exclusive preview launch. Photo: Supplied

UEM Sunrise is targeting both markets for their projected population growth and low vacancy levels.

 

UEM Sunrise chief executive Anwar Syahrin Abdul Ajib​ said in Malaysia earlier this month that the group would focus on central business districts and fringe CBD, where it can tap into its strength in high-rise developments. 

Projected population growth and low vacancy are key reasons for pouring capital into Melbourne’s apartment market. Photo: Supplied

 

“We are very encouraged that Melbourne again has been voted as the most liveable city, and we like the infrastructure, we like the culture, there’s just so many attractions,” Mr Anwar Syahrin said. 

The company’s chief operations officer, commercial, Raymond Cheah, said the group had visited about seven cities in Australia including Perth, Adelaide, Brisbane, Sydney, Melbourne and Canberra. 

More than 95 per cent of residential units were snapped up within two weeks of the launch of Aurora Melbourne Central. Photo: Supplied

Population growth was the predominant reason why Melbourne and Sydney were chosen, he said. 

“We always spend 24 hours in one city to get a flavour of the city itself; the day and the night, the traffic and whether there are people or not,” Mr Cheah said. “We are very concerned with whether there are people staying in the apartments that we build.”

The group has shrugged off warnings of an oversupply in Melbourne’s CBD, citing forecasts of strong population growth. 

Domain Group senior economist Andrew Wilson said vacancy rates for houses and units tightened in Sydney and Melbourne over August.

The Sydney rate for houses dropped 0.1 percentage point to 1.8 per cent, while Melbourne’s was down 0.2 percentage point to 1.7 per cent. The unit markets in both capital cities also tightened. 

Low first home buyer numbers and strong migration were driving demand, he said, but high levels of new building for houses and units and strong investor activity were yet to impact the rental markets. 

“We’re still going to struggle to get enough houses for what is a very strong population growth into both Melbourne and Sydney,” Dr Wilson said.

Compared with the 75 to 80 per cent occupancy rate in Malaysia and Singapore CBD, Mr Cheah said Melbourne and Sydney’s occupancy rate, hovering between 97 and 98 per cent, were extremely high. 

Christina Zhou travelled to Malaysia and Singapore courtesy of UEM Sunrise.