80 Collins sale to set billion-dollar tone for Melbourne market
The race for QIC Global Real Estate’s prized Collins St complex in the heart of Melbourne central business district is coming to a head with two major listed Australian players, Dexus and Charter Hall, in contention as another prime contender, Mirvac, bows out.
The battle for the mixed-use property at 80 Collins St is being closely watched, with the pricing tipped to exceed $1.6 billion, on some accounts, with the landmark nature of the property sale to set the tone for commercial sales this year.
The deal is one of the country’s most complicated with the buyer taking on a property that encompasses an under-construction office tower, a 1970s skyscraper, and a proposed hotel and a luxury retail and restaurant complex.
Commercial Insights: Subscribe to receive the latest news and updates
This has not deterred the two groups that dominate Australia’s office tower scene, and both are seeking to partner with Asian capital to further their ambitions of owning the site.
Charter Hall is chasing the backing of close partner Singaporean group GIC Real Estate, while Dexus has drawn interest from Korean funds, with NPS among its backers elsewhere in its portfolio.
While some players have suggested the complex could trade at a lower sum, once completed, the sale will set benchmarks to underpin the development of a new wave of proposed office towers.
QIC and the parties declined to comment yesterday but the developer has made strong progress in leasing up the office tower and completing the project ahead of bids closing.
The complex has been marketed since last year after the Queensland government-backed funds manager decided to sell the precinct at the “Paris end” of Melbourne’s Collins St.
It tapped JLL and Savills to market the complex and they pitched it as having unique scale and diversity.
Selling the project came after a decade of work as QIC first lodged plans to develop the area in 2008 as it capitalised on its ownership of empty plaza areas around the existing 52-storey tower at 80 Collins St, formerly known as Nauru House.
The new tower fronting Collins, Exhibition and Little Collins streets is slated to be finished in 2020. It will comprise both a next-generation, 43,000sq m premium-grade office tower and a significant refurbishment of the existing tower.
The QIC project not only survived the credit crunch but won key tenants ahead of its competitors. Multiplex is building the new tower, which will have a blue-chip roster of tenants including investment bank Macquarie and consultants McKinsey & Company.
QIC is also drawing top luxury, beauty and lifestyle brands to the 5800sqm retail component, which includes a high-end food and beverage concept.
The proposed boutique 300-room hotel on the Little Collins Street side will be run by Singapore’s SilverNeedle under its NEXT brand.
This article originally appeared on www.theaustralian.com.au/property.
