Rich Lister Tim Gurner has bolstered his pipeline of build-to-sell apartments after acquiring a huge site on St Kilda Road on the Melbourne city fringe that he will convert into an $800 million luxury project with up to 180 residences.
The near half-a-hectare site at 424-426 St Kilda Road, which Mr Gurner has acquired for about $80 million, is the second seed asset for his build-to-sell fund, which is backed by a $400 million commitment from Singaporean sovereign wealth fund GIC.
It comes hot on the heels of Mr Gurner acquiring the fund’s first project, a $200 million site at 189 Kent Street in the Sydney CBD, which he will transform into $800 million of luxury apartments and high-end retail spread across two towers.
Tim Gurner will transform 424 St Kilda Road into $800m worth of luxury apartments.
The expansion of his apartment development pipeline in Melbourne follows Mr Gurner’s controversial remarks on construction worker productivity at the AFR Property Summit two weeks ago, which he later said he “deeply regretted and were wrong”.
He also said that 14 of the 30 sites he owned across the country were currently “on hold” until construction costs settled back down.
Mr Gurner said the acquisition of the 4651-square-metre St Kilda Road site – home to a six-storey office complex called Illoura House – was a “longer-term play”.
“The buildings currently house some long-term tenants, so we’ll see out those leases before launching when the time is right,” he said.
His vision for the site, which has three frontages on the corner of St Kilda Road, Toorak Road and Queens Lane and views over the Royal Botanic Gardens and Albert Park, are for a luxury apartment project similar to what he delivered at Saint Moritz, a completed high-end development overlooking the ocean at nearby St Kilda.
Tim Gurner in conversation with reporter Larry Schlesinger at the AFR Property Summit on September 12. Michael Quelch
“Saint Moritz showed us the depth of this end of the market, and we are excited to evolve and elevate this concept and take it even further with this project,” Mr Gurner said.
The St Kilda Road site has long been mooted as an apartment development opportunity, but previous owners have been unable to get their projects off the ground.
Local developer Woodlink launched a $360 million development with 163 apartments and a Marriott hotel in 2018, but that project never proceeded. Woodlink then sold the site for about $70 million with a permit in place to Chinese developer Mars in 2019.
Mars Development sold the site to Mr Gurner in a deal brokered by JLL’s Josh Rutman and MingXuan Li, alongside CBRE’s Kiran Pillai and Tom Ryan. The vendors were advised by Lewis Tong of Advise Transact.
An approved permit for an 18-storey building with 339 apartments has lapsed. Mr Gurner said he intended to submit a new planning scheme.
“ I have had my eye on this particular site for over a decade, having cut my teeth with [developer and publisher] Morry Schwartz on 401 St Kilda Road in 2008 across the road,” he said.
“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.”
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