Flinders Lane car park to make way for new office tower
Investa Property Group has laid the foundations to develop a new premium office tower in Melbourne by snapping up a car park behind its 567 Collins Street complex in a major deal.
The play expands the footprint of its top-class 567 Collins St property with the purchase of the Schiavello Group’s car park, which could sustain a major tower, according to property records.
Schiavello picked up the car park from fund manager ISPT in 2009 for just $38 million and, while the 10-storey car park at 522 Flinders Lane was one of the city’s largest freestanding complexes, the main drawcard was the site’s longer-term potential.
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The deal comes amid a surge of Melbourne office projects being undertaken by Charter Hall, Dexus and Mirvac as well as industry fund-backed players Cbus Property and ISPT.
The deal pricing likely reflects its potential to become the site of a next-generation tower that would complement 567 Collins St, which is co-owned by the Investa Commercial Property Fund and Canada’s Oxford Property Group.
The move deepens ties between the Investa platform and Oxford, which has been buying new sites after a heavy run of office sales.
Oxford Properties this month emerged as the winner of the race to develop above the planned Pitt Street Metro station in Sydney. It is in a consortium with CPB Contractors and Grocon and will deliver a build-to-rent apartment tower and an office block.
The 55,000sqm tower at 567 Collins St was Melbourne’s largest new premium office tower to be built in a quarter century when completed by CIMIC in 2015. It stands at the fast-growing western end of Collins St near Southern Cross Station and won tenants including law firm Corrs Chambers Westgarth, infrastructure company Jemena, CPB Contractors, and Virgin Active Health Club.
The premium building has large floorplates ranging from 2000sqm to 2500sqm. Any new tower would seek to capitalise on the position at the juncture of the Melbourne CBD, Southbank and Docklands.
Schiavello has been selling some of its key holdings. Last month Crown Resorts said it would pay $80 million to buy Schiavello’s half stake in the proposed One Queensbridge project.
Crown then indicated it was rethinking the amount of residential space in the proposed $2 billion hotel and apartment tower in Melbourne.
This article originally appeared on www.theaustralian.com.au/property.
