Buyers' thirst for Foster's Riverside location
- From: The Australian
- September 29, 2011
Salta Properties manager Sam Tarascio in the Melbourne suburb of Richmond, near where Foster's land may become available Picture: David Geraghty Source: The Australian
THE takeover of Foster's by foreign brewer SABMiller could see an enormous piece of prime real estate in inner suburban Melbourne said to be worth more than $150 million placed on the market.
The local beer maker's 9ha Carlton and United Brewery site in Abbotsford, on the Yarra River just 3km from the CBD, could be offered for sale as SABMiller looks to consolidate Foster's brewing business or move to an area of Melbourne that is more accessible to heavy transport.Asked if Abbotsford would be replaced, SABMiller chief executive Graham Mackay said: "The current management of the company has done a lot of thinking about that . . . people have speculated about it for a long time -- the site itself, the ease of operation on it, possible alternatives, and one can benchmark operating costs and operating ratios to see what benefit might be achieved.
"But we haven't got anything further other than looking at some outside rules of thumb, nor have we factored anything to do with Abbotsford into the numbers."
However, it could be five years before SABMiller was ready to divest the site.
The Abbotsford-Richmond area, which borders leafy Kew and South Yarra, has attracted developers including Salta Properties, which is planning to develop three apartment buildings nearby.
Sam Tarascio, managing director of Salta, said there was no doubt about the fundamentals of the CUB site and the Richmond-Abbotsford precinct in general.
"If it (the CUB site) was on the market,we'd definitely be looking at it," Mr Tarascio said.
Andrew Wood,Victorian managing director of real estate agent Jones Lang LaSalle, said if the site did go on the market there would be strong interest, particularly from offshore developers. "The natural gentrification of the area would mean the site would be supported by planning groups for a residential development," he said.
In 2007, Sydney-based property group Charter Hall teamed up with Perth's Wyllie Group to buy 11 Foster's properties spanning 2ha near the Abbotsford brewery site for $41m.
However, with the property prices flatlining and developers finding funding increasingly difficult to obtain, agent sources said Foster's could struggle to get a good price for the CUB Abbotsford site.
Amcor's 16ha Alphington Paper Mill site, which is just downriver from the CUB Abbotsford and already zoned for mix-use development, has been languishing on the market for months.
Amcor is said to be holding out for a price of about $200m, but sources have told The Australian the inner suburban site would be lucky to fetch over $100m.
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