Telstra Sells $100 Million Prime Site In Melbourne

Earlier this year, Telstra, Australia's largest telecommunications and media company, took their ambitious plan of developing an $800 million-plus tower on their 4,000-square-meter prime development site in central Melbourne off the table, and has recently expressed plans of selling it instead for $100 million, Nick Lenaghan and David Ramli of Financial Review reports.

The site is located in the city's ritzy east end fronting both Exhibition and La Trobe streets and with a view of the Carlton Gardens.

An initial plan to build a tower on the site has been played with by the telco for a year before finally scrapping the idea in July when chief executive Andy Penn took over.

Instead, they are now looking at a better way of maximizing the value of the excess land they have alongside their communication tower in Exhibition Street.

"We are constantly reviewing our extensive property portfolio and have decided to divest a portion of land at our Exhibition Exchange site," John Romano, Telstra's executive director of property said.

"This is a high-profile site with significant value, and we expect to put it on the market in early 2016. We will continue to explore commercial opportunities like these."

Handling the landholding are CBRE's Josh Rutman, Mark Wizel and Lewis Tong, with Charter Keck Cramer as the telco's transaction advisor.

The property already houses several small offices and associated amenities. Telstra was also able to obtain demolition permits last March and August which authorized the subdivision of the larger 8800-square-meter site.

"Securing a footprint of this magnitude in a premium CBD location will be of particular interest to offshore developers, with the site offering multiple development options beyond a standard office or residential tower in isolation," Mr Rutman said.

Originally shortlisted by the telco is Lendlease, backed by institutional investors, and private developer Grocon, which - with its new platform partner, UBS Global Asset Management - was backed by British behemoth M&G Real Estate to develop the Exhibition Street site.