Melbourne could be about to lose an important member of the live music industry this year after it was revealed overnight at the iconic Palace Theatre, formerly The Metro, has been put up in a receivership sale for later this year.

The 2000 capacity venue which has played host to the likes of The Darkness, The Dandy Warhols, Queens Of The Stone Age, Kaiser Chiefs, and will host Splendour sideshows for Lana Del Rey and Miike Snow later this year, has been listed for sale by receivers Ferrier Hodgson, with a number of Asian developers reportedly showing interest.

According to the Property Observer, the three-storey building which has been operating as a live music venue since 1987, but was formerly a theatre and cinema over a hundred years ago, has been put up for sale via an international public tender closing 27th July 2012.

According to agent Mark Wizel, early interest in the building has been primarily from Asian property developers “centred on the highest and best use for the property being a high-density residential project subject to the relevant planning approvals”.

“Sites of this size at the top end of Bourke Street are not readily available for acquisition and, as a result, we are anticipating strong interest from local and overseas buyers, with a particularly high level of enquiry expected from Singaporean, Malaysian and mainland Chinese developers.”

The agent handling the sale, Scott Callow, says there has also been some interest from nightclub operators and publicans who could look “to restore ‘The Metro’ to its former glory days as one of Melbourne’s leading music and entertainment venues.”

But given the attractiveness of the site for redevelopment as a residential high-rise, it seems unlikely any publican would have pockets deep enough to fend off overseas developer interest.

Which presents a problem for Melbourne’s booming local and international music touring scene. The only venue with a capacity of 2000, the Palace sits nicely in between The Forum with a capacity of approx. 1500, and The Palais which a capacity of 2800.

The loss of The Palace as a live music venue would leave a large gap and remove an important stepping stone for acts as their careers grow. It’s a big jump to go from selling 1500 tickets to selling 2800.

The company appointed as receivers back in February say there has been significant interest already in the property and they expect it to fetch at least $15 million when it goes under the hammer.

“The Metro is well known as part of the fabric of life in central Melbourne,” he says. “It’s a brilliantly located site with a huge variety of optional uses and tremendous potential for development.”

Owner Jerry Pilarinos tried to sell the property last year, with an asking price of $20 million, with plans to demolish the venue and building a residential development, although Pilarinos did not have a planning permit at the time.

But the property is now no longer under the control of Pilarinos, after his company Kefi Nominees was forced into administration by Bankwest, who appointed the receivers who have no listed the property for sale.

The worrying news comes off the back of news early this week that Brisbane’s Tivoli Theatre is also for sale, a familiar ring to it after last week’s report of Sydney’s The Basement being put up for public sale.

It’s a grim climate for Australia’s live music scene, with the last 12 months seeing the closure of The Abercrombie Hotel’s doors after a suspicious fire, the passing of The Gaelic, as well as Tone Bar shutting down last August.

It’s a distressing pattern nation-wide too, with Melbourne being the primary victim, following the recent closure of Phoenix Public House (after only six months) and the East Brunswick Club following its Laneway Festival sideshows; as well as both The Arthouse and The Public Bar in the last year. Along with the closure of Canberra’s The Greenroom and Brisbane losing The Troubadour.