The privately held Alfasi steel construction and equipment hire group will reboot its property development arm using a site it bought in one of Melbourne's hottest property sectors for more than $24 million.
The family-run business, based in Dandenong and headed up by Avri Alfasi, son Saar and son-in-law Gill Dvir, has a global workbook of steel design and construction projects that include the new West Kowloon terminus in Hong Kong and Bangkok's second international airport.
The group recently appointed Laurence Peck to run Alfasi Property with a mandate to buy and develop up to five office and hotel assets within the next three years.
The group decided to relaunch the development arm by buying a large site in Richmond's Church Street, the city's most sought-after office sector outside the CBD.
A deal negotiated by David Marks and John Camilleri from Killen Thomas saw two single-storey buildings on a 3000-square-metre site at 506-508 Church Street exchange for $24.7 million, setting a new benchmark land rate of $8200 per sq m.
Both buildings sold with short-term leases in place, one to Australia Post, which uses the building as a southern distribution centre, the other to furniture retailer Sofa Workshop.
A few doors away are the highly visible V and X multistorey office buildings that make up the heart of Church Street's commercial precinct.
Mr Marks said the conversion of office buildings to residential uses in nearby St Kilda Road and Southbank had driven unprecedented interest from creative-sector businesses for space in Richmond, Cremorne and South Melbourne.
"Demand for office space with large floor plates in the Cremorne area continues to grow with numerous major tenants looking to relocate," he said.
Mr Peck said the Church Street purchase would be the first in a series across Australia's eastern seaboard as the group looked to ramp up its development pipeline.
"We saw the opportunity to get the key stakeholding site," he said. Due diligence research revealed underlying demand for 100,000 sq m of space. "We need just 20 per cent of that."
The group hopes to move swiftly on plans for a 20,000 sq m office with open-plan layouts and sustainable features targeting key IT, start-up and creative sectors.
"With the retraction of stock in St Kilda Road, everyone's looking to where they can put these new offices," he said.
Alfasi was also working in conjunction with 3R Hospitality, Elenberg Fraser architects and hotel manager Starwood to find and develop sites for a series of high-end suburban hotels, Mr Peck said.
Mr Marks said the focus on Richmond has seen property values almost double in the past two years.
The firm sold another site at 49 Stephenson Street in Cremorne around the same time for $4.9 million, which also set a benchmark.
The single-storey warehouse on a 400 sq m site was leased to English Tapware Company on a monthly basis for $64,000 a year.
