Jam Factory set for major retail and office redevelopment
The Jam Factory cinema and dining precinct on Melbourne’s famed shopping strip Chapel St is set for an overhaul, with plans lodged for an expansive retail and office development.
Owner Newmark Capital is planning to invest more than $450 million to transform the South Yarra site, with hopes of benefiting from the residential boom underway in the neighbourhood and serving as a catalyst for the area.
The project will feature 50,000sqm of retail, cinemas and dining with pedestrian laneways.
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Another 50,000sqm of office space will be spread across four buildings that can be subdivided into smaller tenancies with floor plates of up to 4000sqm
The investment comes in defiance of concerns about the health of the retail sector. Commercial agents have been touting Chapel St as a counter-cyclical investment proposition given the vacancies on the strip.
Newmark joint managing director Chris Langford acknowledges that parts of the street are not the destination they used to be, but says other parts are thriving.
“Retail evolves very quickly and when you have landlords who haven’t kept investing in their properties … then you fall behind,” Langford says, adding that other landlords have invested and supported the area.
The two-hectare site in the city’s inner south east could have housed a residential project. But joint managing director Simon T. Morris says the group prefers to create a work environment rather than adding supply to the “already flourishing” residential market.
Newmark hopes to attract office tenants in the creative industries such as marketing, media and IT. The site currently houses 8500sqm of office space occupied by Village Roadshow.
Job search giant Seek had been rumoured to be interested in the Jam Factory before inking a deal to move to a new office in Cremorne, although Newmark declined to comment on the speculation.
Morris flagged a long-term investment horizon but says the group considered alternative capital structures — such as selling a stake — for each of its investments.
Construction is set to create 1000 jobs and 5000 jobs will be in place once the precinct is complete.
This article originally appeared on www.theaustralian.com.au/property.