The Australian arm of Singapore-headquartered ARA Asset Management is close to breaking ground on a $800-million office tower in central Melbourne after receiving approval from the council.
The 21-storey office development in Southgate, proposed for 16-60 City Road, was unanimously approved by the Future Melbourne Committee.
The site is marketed as the “key connector” to Melbourne’s popular arts precinct, opposite Flinders Street Station, and will now be transformed into a 39,000sq m office tower with room for 4000 workers.
It currently has 76,600sq m of commercial space across the HWT Tower and IBM Centre and is home to a four-level retail plaza and a basement carpark, which will be demolished to make way for the tower.
ARA acquired the 2.1ha site from Dexus in 2016 for $578 million—representing a cap rate of 6.5 per cent at the time.
“[The location] really is the postcard view of Melbourne and our vision allows Southgate to reclaim its rightful place as an iconic city landmark and tourist attraction,” ARA head of investments Rohan Neville said.
“The Southgate project will generate 350 direct full-time jobs and add more than $400 million in direct gross value to the Victorian economy each year during construction.”
Despite the vote of confidence from the City of Melbourne, councillor Rohan Leppert suggested an alternative motion to invite the Victorian Design Review Panel to take one further look at the proposal before going in front of planning minister Richard Wynne for a final decision.
“We are coming to the pointy end of this application which presents a once-in-a-generation opportunity to change the cityscape of Melbourne,” Leppert said.
“This could allow a closer look at the building massing strategy before going in front of minister Wynne and dare I say those extra six or eight weeks would allow a number of concerns raised to be resolved.
“Whether or not [Richard Wynne] or the applicant agrees there should be a VDRP process it’s clear that there has been a strong level of support from the City of Melbourne.”
The Fender Katsalidis-designed office tower will incorporate more than 10,000sq m of retail and add 2000sq m of north-facing, elevated public space to the ground plane, which will be connected to the riverfront boulevard and neighbouring arts precinct.
“One of the key points of this entire masterplan is to unlock the site and maximise permeability, which in its current format is not happening across the site,” Fender Katsalidis principal Nicky Drobis said.
“The site will open up, and bring people in, as well as being activated by a 160m-long frontage to the promenade through new food and beverage tenancies housed in a series of carefully articulated buildings.”
The tower is targeting a 5-Star Green Star and 5.5-star Nabers rating.