By Cara Waters
CBD business owners are worried the potential sale of a City of Melbourne car park will deprive their customers of parking and hurt visitor numbers.
The car park at 34-60 Little Collins Street is one of the few at the top end of the CBD and is used by customers of nearby restaurants, hotels and theatres.
Billionaire Justin Hemmes is one of the potential buyers of the City of Melbourne’s car park. Credit: Rhett Wyman
The council put the eight-storey property up for sale in May, and a sticker has gone up on its sale sign from commercial property giant JLL saying it is under exclusive offer.
The sale process is ongoing, and industry sources who did not want to be identified said Justin Hemmes, who owns hospitality giant Merivale, is one of the potential buyers, with plans to build a huge nightclub like the Ivy in Sydney.
Hemmes, who agreed to pay $19.25 million to former staff this week who allege they were underpaid, has already bought the adjacent building, which houses Argentinian steak restaurant San Telmo and pizzeria Pizza Pizza Pizza.
His other property holding in Melbourne is Tomasetti House in Flinders Lane, which he has been redeveloping since buying it in 2021.
There has been a three-stage bidding process for the car park, which has parking for 940 cars. Interest has come from restaurateurs, developers, and private and institutional groups.
Property giant Dexus has a lease on the car park with 13 years to run, for which it pays $468,822 a year.
If the car park is sold, its lease would continue with the new owner unless Dexus and that owner agreed to end it early.
Cult Thai restaurant Soi 38 is already preparing to move from its spot in the car park to the newly renovated Tivoli Arcade at 235 Bourke Street.
The City of Melbourne is selling the car park at 36-40 Little Collins Street.Credit: Joe Armao
Industry sources have suggested $30,000 per square metre is the going land rate for the top end of the city, valuing the car park at $116.5 million.
Jason Marriner, chief executive of the Marriner Group, which operates the Princess, Comedy, Forum and Regent theatres and the Plaza Ballroom, said the lease to Dexus meant it was unlikely the City of Melbourne would achieve an optimal price for the car park.
“You would hate to lose the car parking amenity that is currently there,” he said. “It also seems an odd way to sell a building, while it is under a lease and very constrained.”
Marriner said the move to sell the car park while it was under lease was similar to Lord Mayor Nick Reece’s election pledge to sell the Regent Theatre.
“For all the Regent hoopla, this would not be the highest value, let alone the best outcome for the land,” he said.
Jason McConnell, owner of the San Telmo group of restaurants, which includes San Telmo, Asado, Pastuso, Palermo, Robata, and the Aviary Hotel, said San Telmo had eight years remaining on its building lease, and while Hemmes had tried to convince him to move out earlier, he was not going to.
McConnell said it would be good to see another nearby hospitality venue, but he was concerned about the loss of parking.
“We would miss the parking,” he said. “If they pull [the car park] down, they should have to keep the parking.”
An “under exclusive offer” sticker has gone up on the car park’s sale sign. Credit: Joe Armao
Hani Akaoui, president of business group the Bourke Hill Precinct, said there had been little consultation by the council with potentially affected parties in the area.
“It is such a large land holding, so it has an impact on everyone in the area,” he said. “We understand it is a City of Melbourne asset, but the City of Melbourne has to look after the stakeholders and owners in and around its asset at the same time.”
Akaoui said he and other business owners were keen to know who was going to buy the site and whether car parking would be retained.
“The entire area when it comes to entertainment venues, restaurants, hotels, businesses, everyone relies on this car park in the area. We understand the plans are to have a super-entertainment venue and remove the car park.”
A spokesman for the City of Melbourne declined to comment on the backlash to the car park sale.
“After consulting with the community, council decided to sell 34-60 Little Collins Street,” he said. “The land is being sold through a competitive market process, with proceeds reinvested to deliver vital community infrastructure.”
Hemmes, JLL and Dexus all declined to comment.
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