After a big win in the Melbourne Cup, Maxcap Group is betting on the CBD office sector’s renaissance, putting $132 million behind Golden Age Development Group’s 130 Little Collins Street project.
The plans included a 28-storey office tower with 49 suites, three retail units and a ground floor restaurant designed by Cox Architecture.
Golden Age picked up the 651sq m site and existing building in mid-2019 for $40.5 million and gained approval for the new plans in August, 2020.
However in this time, Melbourne’s office market has been buffeted by a massive occupancy slump—the Property Council of Australia indicating occupancy was at 6 per cent of pre-Covid levels in September.
Occupancy had not reached 50 per cent since the pandemic began, however, all restrictions for wearing masks to the office will be lifted when 90 per cent of the population is vaccinated, which is predicted to be before the end of November.
Maxcap chief investment officer Brae Sokolski was among the shareholders in this year’s Melbourne Cup winner Verry Elleegant.
Golden Age managing director Jeff Xu said there was currently limited opportunity for quality office space of all sizes in the east-end of the Melbourne CBD.
“We’re witnessing a preference towards more boutique floorplans as a result of businesses scaling down their requirements for an office, coupled with something that greater emphasizes lifestyle and wellbeing,” Xu said.
“We have very successfully targeted owner occupier commercial tenants and have achieved 60 per cent of presale of the project since launching earlier this year.
“Many tenants within Melbourne’s eastern core have historically had to renew within the precinct given the lack of supply and availability but 130 Little Collins has catered to the pent up demand.”
Maxcap co-founder Brae Sokolski said they have partnered with Golden Age on dozens of projects in the past.
“We are delighted to have such a long track record with Jeff Xu and his company and look forward to continuing this positive relationship long into the future,” Sokolski said.
Recently international investor Apollo Global Management purchased a 50 per cent stake in the Australian non-bank lender.