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The Urban Developer’s list of the top 10 builders reveals the top-performing firms and projects shaping Australia’s built environment…

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<p>A community group has successfully kiboshed plans for a $300-million apartment tower in South Brisbane, filing an appeal against its approval in the Planning and Environment Court.</p><p>Its developer, Brisbane’s Aria Property Group, is now pursuing a healthcare scheme in its place. Aria won approval for a significantly scaled-back apartment tower, reducing its original plans from 32-storeys to 20, in November.&nbsp;</p><p>Aria development manager Michael Hurley said that the project was no longer feasible.&nbsp;</p><p>“Circumstances have conspired against us. Objections to the scheme, coupled with an overheated construction market have rendered the project unfeasible.”</p><p>The revised 20-storey Urban Forest apartment scheme, marketed as “the world’s greenest residential building”, is the subject of the West End Community Association’s appeal.&nbsp;</p><p>“It’s the straw that broke the camel’s back,” Michael Zaicek, Aria’s commercial manager, told <em>The Urban Developer</em>.</p><p>“And build costs have gone up 30 per cent in less than nine months.</p><p>“There’s so many factors at play, if we’re sitting in the planning court for six, nine or 12 months, the builder won’t hold that price.”</p><div id="1YdqHooEcAGmwfEOR9QCHR"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6BgIqfnyehh4lgmA7BXaxL/684831cfd940df6d6e53ff96b256cc3e/GlenelgSt.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6BgIqfnyehh4lgmA7BXaxL/684831cfd940df6d6e53ff96b256cc3e/GlenelgSt.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ After scaling back its original 32-storey scheme, Aria’s approval for a 20-storey apartment tower on Glenelg Street has been appealed by a West End community group.<br><br></span></div></div><p>Zaicek said that, while Aria hasn’t entirely jetissoned the residential scheme, they’re progressing the medical development application.&nbsp;</p><p>“We’ve lodged the medical DA, we’re preparing marketing packs, talking to tenants and we’ve set ourselves internal targets. If we get a certain number of precommitments we’ll progress the commercial project.”</p><p>Aria lodged plans for the 2400sq m site on Monday with the Brisbane City Council. The documents outline a medical building with 15,642sq m of NLA and 326 carparks across five basement levels. The healthcare scheme, unlike the residential tower, is code compliant at 12-storeys.</p><p>“The site is great, it’s over the top of Southbank, close to all the major roads and the biggest hospital precinct in the southern hemisphere,” Zaicek said.</p><p>“It’s an interesting prospect—it opens up medi-hotels, private hospital operators or a collection of smaller healthcare tenants.” Zaicek said.</p><p>“Basically we’re out talking to everyone. It’s a lot of NLA, it brings into play everything from private hospitals to smaller medical tenants. There’s a lot of requirements around the 2000 to 3000sq m mark.”&nbsp;</p><p>Whether the developer will retain the asset is not yet up for discussion, but given the <a data-mce-href="https://www.google.com/url?q=https://www.theurbandeveloper.com/articles/healthcare-yields-decline-institutional-investor-capital&amp;sa=D&amp;source=docs&amp;ust=1652243219976078&amp;usg=AOvVaw31mGkmjAOrtGAV6c9VtJd_" href="https://www.google.com/url?q=https://www.theurbandeveloper.com/articles/healthcare-yields-decline-institutional-investor-capital&amp;sa=D&amp;source=docs&amp;ust=1652243219976078&amp;usg=AOvVaw31mGkmjAOrtGAV6c9VtJd_">institutional appetite for the fast-growing sector</a>, and cap rates sitting around 4.5 per cent, it has caught Ziacek’s interest.</p><p>“It’s a strong proposition. With our balance sheet and our track record of delivery, we can compete hard in this space.”</p><p>If the scheme progresses, Aria will follow in the footsteps of private Brisbane developer Silverstone, which has <a data-mce-href="https://www.google.com/url?q=https://www.theurbandeveloper.com/articles/dexus-healthcare-development-sites-brisbane-131m&amp;sa=D&amp;source=docs&amp;ust=1652241705164965&amp;usg=AOvVaw0M8vRk3Pd0wK_xpAJDd8hS" href="https://www.google.com/url?q=https://www.theurbandeveloper.com/articles/dexus-healthcare-development-sites-brisbane-131m&amp;sa=D&amp;source=docs&amp;ust=1652241705164965&amp;usg=AOvVaw0M8vRk3Pd0wK_xpAJDd8hS">offloaded purpose-built healthcare developments</a> to Charter Hall and Dexus.</p>

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<div id="3SSZlShovtOv4c7UJxcqGt"></div><div><p>Developer Milligan Group has unlocked one of Sydney CBD’s few remaining prime sites, with plans in the works to build the world’s tallest hybrid timber tower.</p><p>The local developer, led by James Milligan, has received its first tentative tick of approval from council to rezone a 2000sq m site on the corner of Hunter and Pitt streets. </p><p>The proposal, which will be considered by the Central Sydney Planning Committee on Thursday, outlines a 53-storey tower reaching 220 metres—nearly 40 metres higher than <a data-mce-href="https://www.theurbandeveloper.com/articles/worlds-tallest-timber-tower-grange-development-south-perth" href="https://www.theurbandeveloper.com/articles/worlds-tallest-timber-tower-grange-development-south-perth" target="_blank" rel="noopener">Grange Development’s Perth proposal</a> and outstripping Atlassian’s <a data-mce-href="https://www.theurbandeveloper.com/articles/atlassian-unveils-timber-tower-hq-at-tech-central" href="https://www.theurbandeveloper.com/articles/atlassian-unveils-timber-tower-hq-at-tech-central" target="_blank" rel="noopener">180-metre Sydney central HQ</a>.&nbsp;</p><p>The amendments would introduce a new maximum height and increase the allowable floor space ratio from 8:1 to 22:1. In return, Milligan Group would provide a 3 per cent developer contribution to fund community infrastructure and a through-site link, connecting Pitt to Hunter Street.</p><p>If endorsed by council, the proposal will proceed to the state planning department for gateway determination.</p><p>Milligan Group quietly amalgamated seven titled lots to pull off the venture, managing strata owners and individual building owners to combine the 2,108sq m site.</p><p>The site, which sits across 15-25 Hunter Street and 105-107 Pitt Street is close to Wynyard Station and the northern entrance to the Martin Place metro. Its western boundary adjoins the <a data-mce-href="https://www.theurbandeveloper.com/articles/sydney-metro-unveils-hunter-street-station" href="https://www.theurbandeveloper.com/articles/sydney-metro-unveils-hunter-street-station" target="_blank" rel="noopener">future Hunter Metro Station</a>.</p><p>Milligan Group managing director James Milligan declined to comment when approached by <em>The Urban Developer</em>.&nbsp;</p></div><div><picture><img src="//images.ctfassets.net/8pr762qjocl3/6MKTPODdZIFvf9xTdQLGiv/f2b1e939ad3fcf3981a462d7a510516c/Screen-Shot-2022-06-20-at-4.19.50-pm.jpg" alt="A photomontage of the indicative concept design in central Sydney context (aerial). Image: Bates Smart" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6MKTPODdZIFvf9xTdQLGiv/f2b1e939ad3fcf3981a462d7a510516c/Screen-Shot-2022-06-20-at-4.19.50-pm.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Milligan Group amalgamated the site over five years, spending an estimated $300 million. Image: Bates Smart<br><br></span></div></div><p>The tower would have a total gross floor area of 51,150sq m—comprising 43,300sq m of commercial NLA, 5465sq m of retail and a 2390sq m rooftop bar or restaurant.</p><p>The amendments recommended by the City of Sydney require the developer to deliver a minimum 6-star Green Star building, with documents outlining plans for carbon negative construction.&nbsp;</p><p>The proposal retains the Victorian-era Italianate Pangas House, which is not currently identified on local or state heritage lists. It is understood that the City of Sydney is moving ahead with the heritage listing of the four-storey building, despite extensive modifications to the interior of the building made in the 1980s.</p><p>The remaining buildings on the site, a five-storey office building at 19-21 Hunter Street, a 15-storey formerly strata-titled office at 23 Hunter Street and two eight-storey buildings at 105 and 107 Pitt Street, will be demolished.&nbsp;<br></p><div id="3CR51zzFl2a0x6n2rFEGQR"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6MFogsqpMiTNL2RJKaeTbq/f7db950f76b83a51afd2627379715ff8/11113-way-split-new.jpg" alt="Podium form fronting Pitt Street. Image: Bates Smart" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6MFogsqpMiTNL2RJKaeTbq/f7db950f76b83a51afd2627379715ff8/11113-way-split-new.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ If approved, the 53-storey skyscraper will become the world's tallest hybrid timber building. Image: Bates Smart<br><br></span></div><div><p>Milligan Group will be required to undertake a competitive design process—the city’s design excellence strategy now stipulates a minimum 50 per cent of firms must have an Australian principal or lead—in exchange for a 10 per cent uplift in floor space. The gateway sets the timeframes for public exhibition and completion of the planning proposal.&nbsp;</p><p>The developer’s concept plans for the site have been in the works for more than two years. Milligan Group commenced pre-lodgement consultations with the City of Sydney in January, 2020.</p><p>The developer keeps a low profile. Aside from a <a data-mce-href="https://www.theurbandeveloper.com/articles/developer-sells-pyrmont-property-under-construction-for-297m" href="https://www.theurbandeveloper.com/articles/developer-sells-pyrmont-property-under-construction-for-297m" target="_blank" rel="noopener">$297-million deal with Singapore’s Suntec REIT</a> for 21 Harris Street—widely published by the financial and property press—Milligan Group’s projects have largely flown under the radar.</p><p>Previous developments include an A-grade office building in York Street, an 18-unit apartment block in Alexandria and a $107-million Waterloo apartment complex developed in joint venture with Thirdi Group.</p><p>In 2020, Milligan Group sold its current office digs, a warehouse-converted commercial building in Beaconsfield, to Sydney-based asset manager Peak Equities for $20 million.<br><br></p></div></div><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Phil Pearce on Striking History-Making Property Deal

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>ESR Australia and capital partner GIC has picked up Blackstone’s $3.8-billion portfolio of warehouse and industrial assets in the largest direct property deal in Australian history.</p><p>The deal, finalised on Saturday night, was struck on a 4.5 per cent yield and makes ESR the third-largest manager of industrial real estate in the country behind Goodman Group and Charter Hall.</p><p>The 45-asset portfolio returns about $160 million in fully-leased income annually with a 6.9 weighted average lease expiry and includes assets in Sydney, Melbourne, Brisbane, Adelaide and Perth.</p><p>Private equity giant Blackstone opted for a trade sale over an IPO, for which it had tapped Morgan Stanley and JPMorgan to run a dual-track process for its so-called “Milestone portfolio”. </p><p>AXA and Logos, along with Mapletree and ASX-listed Dexus, made up the final five bidding groups for the portfolio.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>ESR chief executive Phil Pearce said that the group had been preparing for a potential sale of the Blackstone portfolio since ESR Cayman established a presence in Australia in 2018.</p><p>“We knew that Blackstone had the portfolio and had assembled it over a number of years, and suspected that they would ultimately sell it as they had done in Europe and the US,” he said.</p><p>“So there is a massive sense of relief because it has been a focus and key objective to secure this portfolio for a number of years.” </p><p>Pearce said that the ESR Australia team had been working on the deal since January. ESR will contribute 20 per cent of the equity, with Singapore’s GIC making up the remaining 80 per cent. </p><p>The portfolio will be managed under the newly-formed ESR Milestone Portfolio (EMP) and includes the acquisition of Blackstone’s management platform. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4926043a-1c23-4a3e-87a4-40179273e0f1.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ ESR Australia CEO Phil Pearce. ESR outbid AXA IM and Logos, Dexus, and Singapore&#x27;s Mapletree to secure the portfolio. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The sizeable deal underscores shifting investment preferences towards warehousing <a href="https://theurbandeveloper.com/articles/mubadala-kkr-team-up-with-logos-group">assets</a> in Australia—a key beneficiary of the sustained <a href="https://theurbandeveloper.com/articles/lockdowns-e-commerce-fuel-warehouse-shortage-ubs">growth</a> in ecommerce sales during the pandemic.</p><p>Pearce said the structural changes in the industrial sector and continued demand for logistics real estate would support rental growth in the medium- and longer-term.</p><p>“We are a long-term investor, so we’re more interested in the total return over a number of years,” he said.</p><p>“The initial yield is not the main domain focus for us, the outlook for rental growth and the opportunity for development upside [is what attracted us] to the portfolio.”</p><p>With a land area of 3.6 million sq m and gross lettable area of 1.4 million sq m, the site cover sits at 38 per cent—providing significant scope for further development.</p><p>“We certainly didn’t look at it as a passive investment, it was a portfolio we worked very hard. We’re prepared to activate the development opportunities once they became available,” Pearce said.</p><p>“It’s the icing on the cake in terms of the return. I think active portfolios give you the opportunity to outperform if you execute on your strategy.”</p><h2><strong>Transaction ‘won’t be seen again’ in Australian logistics</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/2671fba9-4991-433e-ae6e-0327d4195809.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Institutional demand for logistics is expected to further cap rates compression in the sector.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>JLL industrial head of capital markets Tony Iuliano, who advised Blackstone on the sale, said that the data room involved 54 groups. </p><p>“A combination of sovereign wealth funds, pension funds, REITs and life insurance groups totalling $45 billion of capital that participated,” he said.</p><p>“This transaction is a transformational event and one which will most likely never be seen again in logistics.</p><p>“It’s history in the making. The opportunity to access more than 90 tenants and a management platform with significant IP is enormous for any group.” </p><p>Research from the commercial real estate agency estimates $45 billion of capital will be deployed into the industrial sector in 2021. </p><p>For context, Iuliano said that there had been an annual average of $4.5 billion in industrial investment sales in recent years.</p><p>More than 2 million sq m of supply was added to the industrial sector during 2020, pushing development pipelines to 13-year <a href="https://theurbandeveloper.com/articles/industrial-development-pipeline-investments">highs</a> along the eastern seaboard. </p><p>UBS analyst <a href="https://theurbandeveloper.com/articles/lockdowns-e-commerce-fuel-warehouse-shortage-ubs">Grant McCasker said</a> that the lion’s share of new industrial property in 2021 will be led by development in Sydney’s 850ha Mamre Road <a href="https://theurbandeveloper.com/articles/nsw-mirvac-mamre-road-industrial-precinct">precinct</a>. </p><p>“Despite the solid demand outlook, rental growth is likely to remain flat in outer markets reflecting increased supply and low cap rates,” he said. </p><p>Nearly 80 per cent of Blackstone’s industrial portfolio is on the eastern seaboard, with more than half of the portfolio in Melbourne. Tenants include international cold storage giant Lineage Logistics, WesTrac, Toll and Woolworths.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/a9387aca-f350-46cc-a318-9f87561065d0.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Blackstone opted for the trade sale over a $1 billion-plus public listing.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Blackstone had pulled together the portfolio across nearly 30 different transactions, starting with the $640-million acquisition of 26 industrial assets from ASX-listed Goodman Group in 2016.   </p><p>Morgan Stanley, JPMorgan, Eastdil and JLL advised Blackstone on its exit. </p><p>ESR Australia remained largely self-advised with Savills providing valuation services and Norton Rose Fulbright providing legal advice. </p><p>With the process now at an end for its milestone portfolio, Blackstone may instead turn its attention to its <a href="https://theurbandeveloper.com/articles/blackstone-modifies-crown-buyout-deal">pursuit of Crown Resorts</a>. </p><p>The troubled gaming giant struck a deal with the NSW Independent Liquor and Gaming Authority on Friday—with Packer retaining his 37 per cent stake, meaning he can still play a role in accepting, or rejecting, any takeover proposals. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><u><strong>Click here</strong></u><strong> to learn more.</strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/42d51508-aada-42ab-86fe-bfab156730c0.jpeg" width="720"/></picture><div></div></div></div></div></div></div></div>

ESR Australia and capital partner GIC has picked up Blackstone’s $3.8 billion portfolio of warehouse and industrial assets...

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Dexus has taken a 50 per cent-plus stake in Atlassian’s $1-billion timber tower anchoring Sydney’s <a href="https://theurbandeveloper.com/articles/sydney-central-station-tech-hub-includes-atlassian-anchored-skyscraper">tech precinct</a> next to Central Station. </p><p>While the ASX-listed landlord declined to comment on the speculation, industry sources said that the transaction was struck on a “low 4s” cap rate—reflecting the strong occupancy profile of the Nasdaq-listed <a href="https://theurbandeveloper.com/articles/sydneys-silicon-valley-secures-software-giant-atlassian">tech giant Atlassian</a>, who will remain an equity partner in the project.   </p><p>The 40-storey <a href="https://theurbandeveloper.com/articles/atlassian-unveils-timber-tower-hq-at-tech-central">skyscraper</a> has 60,000sq m of net lettable area, with Atlassian’s headquarters taking at least 85 per cent of the tower’s office space, leaving just six floors. </p><p>Based on comparable office rents—Poly’s <a href="https://theurbandeveloper.com/articles/poly-george-street-tower">210 George Street</a> is leasing for around $1,300 a square metre—and a sub 4.5 per cent cap rate, the 60,000 square metre office likely transacted around the $28,000 per square metre-mark. </p><p>Dexus pipped fund manager ISPT to the sought-after partnership and is understood to be finalising negotiations with Atlassian.</p><p>The timber skyscraper will add to its neighbouring $2.5-billion twin-tower <a href="https://theurbandeveloper.com/articles/dexus-frasers-name-architect-for-25bn-central-place">Central station plans</a>, which will bring 150,000sq m of net lettable area to the market once developed. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/0ddec65a-4f24-4db6-bf86-de558a828203.jpg" width="870"/></picture><div><span style="align-content:center;opacity:0.8">▲ Dexus is selling a 50pc stake in the Harry Seidler-designed Grosvenor Place.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Meanwhile, a 50 per cent stake in Dexus’ 44-storey Grosvenor Tower has hit the market. The group’s Grosvenor Place Holding Trust owns a 37.5 per cent interest in the tower, according to financial statements. </p><p>A Dexus spokesperson confirmed that the group is selling down its entire interest in the tower, which lost <a href="https://theurbandeveloper.com/articles/deloitte-makes-3bn-circular-quay-tower-its-new-headquarters">anchor tenant Deloitte</a> to AMP’s Quay Quarter last year.</p><p>Chinese sovereign wealth fund China Investment Corporation is believed to have picked up another 50 per cent to add to its existing 25 per cent ownership in the tower, <em>The Australian</em> first <a href="https://www.theaustralian.com.au/business/property/china-wealth-fund-behind-1bn-grosvenor-place-swoop/news-story/391c83175eecd12fadd5b5d1df2842f7">reported </a>last week.   </p><p>In Melbourne, Dexus <a href="https://theurbandeveloper.com/articles/dexus-offloads-452-flinders-street-for-450m">offloaded</a> the 22-storey 452 Flinders Street to German investor Deka Immobilien for $440 million. Chief executive Darren Steinberg said that the group will <a href="https://theurbandeveloper.com/articles/dexus-offloads-office-assets">continue to recycle assets</a> to invest in more resilient markets. </p><p>“With Australia in a recession, we are preparing for subdued tenant demand and increased vacancy levels in our core office markets,” Steinberg said.</p><p>The country’s largest office landlord <a href="https://theurbandeveloper.com/articles/dexus-offloads-office-assets">reported</a> that it collected 98 per cent of its rent across the June quarter, while the group’s office portfolio occupancy remained steady at 95.6 per cent.</p></div></div></div></div></div>

Dexus has taken a 50 per cent stake in Atlassian’s $1 billion timber tower anchoring the government-backed tech precinct...

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Property fund manager EG has acquired a site in Brisbane’s Fortitude Valley, just 1km north of its CBD, for $27.72 million on a tight 4.7 per cent net yield.</strong></p><p>The 3,582sq m site has development approval for two separate schemes — one residential, one commercial — with Lang Walker’s Walker Corporation scrapping the apartment scheme after the market turned in 2017.</p><p>Walker Corporation acquired the whole-block island site in 2015 for $22.2 million.</p><p>The developer later won approval for a 26-storey A-grade office tower comprising 44,000sq m of net lettable area and ground floor retail. Cox Architecture designed the scheme. </p><p>The $400 million green star-rated office tower would eventually house up to 5,000 workers, Walker Corporation said.</p><p>Related: <a href="https://theurbandeveloper.com/articles/mirvac-ditches-student-accommodation-for-ann-st-office-tower">Mirvac Ditches Student Accommodation for Ann St Office Tower</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/8fd0c4bb-4152-4075-9783-51bf9ada8ac3.jpg" width="920"/></picture><div><span style="align-content:left;opacity:0.8">Walker Corporation&#x27;s amended scheme for a 26-storey commercial tower.</span><span style="float:right;opacity:0.8">Cox Architecture.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Located <a href="https://theurbandeveloper.com/articles/a-retail-renaissance-in-australias-entertainment-precinct">close to trendy James Street</a>, EG’s latest asset joins a swathe of office development in the area including <a href="https://theurbandeveloper.com/articles/consolidated-properties-lodge-plans-for-250m-commercial-tower-in-brisbane">Consolidated Properties’ $250 million office scheme</a> at 895 Ann Street and <a href="https://theurbandeveloper.com/articles/new-commercial-proposal-bring-grade-offices-brisbanes-small-businesses">Pellegrino Group’s commercial building</a> at 89 McLachlan Street. </p><p>The 801 Ann Street site is the eighth asset to join EG’s Yield Plus Infrastructure No. 2 fund, which has a $750 million real estate mandate. </p><p>EG has more than $2.4 billion worth of assets under management. </p><p>Related: <a href="https://theurbandeveloper.com/articles/construction-begins-on-brisbanes-first-vertical-school">Construction Under Way on Brisbane’s First High Rise School</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/5f356649-2e30-40b9-ba32-3429a4bced6e.jpg" width="4200"/></picture><div><span style="align-content:left;opacity:0.8">The prized 3,582sq m corner site is currently fully-leased to Volvo&#x27;s office, showroom and car service centre. </span><span style="float:right;opacity:0.8">Supplied.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>In 2018, the Sydney-based fund manager picked up a <a href="https://theurbandeveloper.com/articles/property-fund-manager-eg-aquires-brisbane-office-tower">17-storey Brisbane office tower</a> from Peter Harburg’s portfolio and offloaded Fortitude Valley’s Optus Centre site for $23.5 million.</p><p>The site, which had approval for a controversial apartment scheme, was acquired by Scott Hutchinson of Hutchinson Builders for the 3,300-person capacity <a href="https://theurbandeveloper.com/articles/brisbane-investors-bet-big-new-40-million-music-venue">Fortitude Valley Music Hall</a>.</p><p>A spokesperson for EG Funds said that the site had been initially acquired as a yield producing asset. The Volvo showroom and car service centre lease expires in 2024.</p><p>The transaction was brokered off-market by JLL’s Seb Turnbull.</p></div></div></div></div></div>

Property fund manager EG has acquired a site in Brisbane’s Fortitude Valley, just 1km north of its CBD, for $27.72 million.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Hobart’s popular Macq01 hotel has sold for just under $50 million to a syndicate of investors made up of local families. </p><p>The boutique 114-key hotel was developed by the Vos Group and hit the market in February. </p><p>The syndicate includes gambling giant the Federal Group — owned by the Farrell family — Hobart property player Robert Rockefeller, Knight Frank partner Scott Newton and local investment banker Greg Woolley.</p><p>The Federal Group had operated the hotel on a long-term lease — an operating structure with a growing appetite among institutional investors. The group, which also owns the nearby Henry Jones Art Hotel, will retain the head lease. </p><p>Speaking at <em>The Urban Developer’s</em> hotel summit in Sydney on Friday, JLL’s Peter Harper cited <a href="https://theurbandeveloper.com/articles/hobarts-tourism-boom-drives-hotel-developments">Macq01</a> as a notable recent transaction.</p><p>“Macq01 is an incredible asset, the amount of enquiry we had was extraordinary. People are viewing Tasmania in the same way that the South Island of New Zealand was [viewed] 20 years ago.”</p><p>“Tasmania has been a really interesting investment market for quite some time now.”</p><p>The 4.5-star luxury Macq01 is the fifth transaction for Harper in Tasmania’s hotel market in the year to date.</p><p>“[And] we have another major hotel asset under contract. </p><p>“There is no doubt investors are increasingly recognising the outstanding fundamentals of the market and its growth potential,” Harper said.</p><p>Tasmania’s hotel market recorded a 6 per cent increase in the revenue per available room metric over the year to March, according to CBRE’s first quarter hotel market overview. </p><p>The island state bucked the trend of slower growth nationally, registering strong growth across all key performance indicators. Occupancy grew 2.1 per cent and annual daily revenue 3.8 per cent, while there was a 13.6 per cent increase in the nights spent in hotels. </p><p>More than 1,700 rooms — 55 per cent of total stock — is forecast to come on line over the next three years in Hobart, placing significant <a href="https://theurbandeveloper.com/articles/hobarts-tourism-boom-drives-hotel-developments">pressure</a> on the market. </p><p>“The sheer volume of hotels coming to market over the next three years will exert pressure on hotel performance [and] the market will struggle to absorb the new product,” CBRE said.</p><p>The 120-key Vibe Hotel will come on line in early 2020, along with two five-star new build hotels: the 187-key Crowne Plaza and 128-key The Tasman.</p></div></div></div></div></div>

Hobart’s popular Macq1 hotel has sold for just under $50 million to a syndicate of investors made up of local families.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Demand for office space outside of Sydney’s CBD has pushed vacancies to below 3 per cent, with Pyrmont experiencing 26 per cent rental growth as it styles itself as Sydney’s own Silicon-Valley.</p><p>The trend toward fringe office markets has been driven by above-trend population and employment growth, primarily in the information, media and technology sector. </p><p>The once-industrial, fringe office market attracting tech firms and edgy start-ups narrative is not new — Melbourne’s <a href="https://theurbandeveloper.com/articles/tech-centric-cremorne-the-most-talked-about-office-precincts-in-the-country">Cremorne</a> has also claimed the “Australia’s Silicon Valley” mantle, while Brisbane’s Fortitude Valley has <a href="https://theurbandeveloper.com/articles/fortitude-valley-to-welcome-state-of-the-art-ai-hub">consolidated</a> itself as Brisbane’s start-up capital.</p><p>Knight Frank associate research director Katy Dean says that growing demand from creative and knowledge-intensive industries on the back of widespread technological adoption has created a transformation in the office market from central to Everleigh. </p><p>Knight Frank’s latest Sydney city fringe office market report revealed that overall vacancy in the fringe office markets had compressed to well below the 4.1 per cent in the CBD.</p><p>“Pyrmont, Ultimo and Surry Hills have been central to this transformation, mainly due to their proximity to the CBD, and remain the largest office markets in the southern fringe,” Dean said. </p><p>Ultimo and Surry Hills had both recorded large annual rental growth numbers — at 18 per cent and 21 per cent respectively — while Pyrmont’s rents sit at between $750/sq m to $940/sq m. </p><p>“On a net effective basis, since 2016 rents have double in Surry Hills to $610 per square metre.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Related: <a href="https://theurbandeveloper.com/articles/pyrmont-to-rise-to-the-heights-of-sydney-cbd-images">Pyrmont to Rise to the Heights of Sydney CBD: Images</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Recent major sales activity: Sydney fringe office market</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>Address</th><th>Price $</th><th>$/sq m NLA</th><th>Vendor</th><th>Buyer</th></tr></thead><tbody><tr><th>19 Foster Street, Surry Hills</th><th>$39.5m</th><th>$12,524</th><th>Security Invest. Aust</th><th>Marks Henderston</th></tr><tr><th>19-37 Glebe Street, Glebe</th><th>$43m</th><th>$12,286sq m</th><th>Private</th><th>Private</th></tr><tr><th>100 Broadway, Chippendale</th><th>$77.1m</th><th>$14,154sq m</th><th>Frasers/IIG</th><th>MTAA Super</th></tr><tr><th>111-117 Devonshire Street, Surry Hills</th><th>$21.5m</th><th>$10,312</th><th>Private</th><th>Private</th></tr><tr><th>19 Harris Street</th><th>$143m</th><th>$11,378sq m</th><th>Kuehne Real Estate </th><th>AEW Capital</th></tr><tr><th>38-42 Pirrama, Pyrmont</th><th>$150m</th><th>$9,192sq m</th><th>Aqualand</th><th>Google</th></tr><tr><th>29-43 Balfour Street, Chippendale</th><th>$30m</th><th>$12,000sq m</th><th>Private</th><th>Marks Henderson</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Tech giants commit</strong></h2><p>In February, Atlassian <a href="https://theurbandeveloper.com/articles/sydneys-silicon-valley-secures-software-giant-atlassian">signed up </a>as anchor tenant at Sydney’s new innovation and technology precinct, while Australian fintech company Quantium has committed to anchor Mirvac’s Locomotive workshops in South Everleigh. </p><p>Quantium will join CSIRO, the Seven Network and various technology start-ups in the area. </p><p>Mirvac was given approval in 2016 to develop the South Everleigh precinct — formerly known as the Australian Technology Park — given the mandate to bolster Sydney’s status as a global technology and innovation hub. </p><p>The ASX-listed developer <a href="https://theurbandeveloper.com/articles/mirvac-recieve-heritage-approval-for-australian-technology-park-workshops">secured</a> sensitive heritage approvals earlier this year to redevelop the century-old Locomotive Workshops in its bid to restyle them as a technology hub. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/fab9b8ec-4bcd-4a70-88d0-5af6b2f73ffc.png" width="2020"/></picture><div><span style="align-content:center;opacity:0.8">▲ Knight Frank research. Supplied.</span></div></div></div></div></div></div></div>

Demand for office space outside of Sydney’s CBD has pushed vacancies to below 3 per cent.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Melbourne’s Westfield Doncaster is set to become one of the largest shopping centres in the country after its $500 million expansion plans were given the green light by Victorian planning minister Richard Wynne.</strong></p><p>The Scentre Group-owned Westfield will overtake its recently-revamped neighbour Eastland by more than 20,000sq m once the redevelopment is complete. </p><p>The approved masterplan includes a 14-storey tower atop a two-level retail podium, an expanded bus interchange and multi-storey car parking.  </p><p>The makeover will add 43,000sq m of retail and 18,000sq m of commercial office space to Westfield Doncaster. </p><p>The planning minister said that the expansion will be a major boost for the Victorian economy. </p><p>“Melbourne is already the nation’s retail capital and this major expansion will cement its reputation for the years to come,” Wynne said. </p><p>While anemic consumer spending has put pressure on Australia’s shopping centre <a href="https://theurbandeveloper.com/articles/deteriorating-outlook-hits-developers-in-residential-retail-sectors-">landlords</a>, Victorians spent a record $78.9 billion on retail sales over the last year. </p><p>The expansion will make Westfield Doncaster one of the largest shopping centres in the country, only surpassed by <a href="https://theurbandeveloper.com/articles/melbournes-chadstone-the-most-profitable-shopping-centre-in-the-country">Chadstone</a>, Westfield Fountain Gate and Westfield Pitt Street.  </p><p>Related: <a href="https://theurbandeveloper.com/articles/myers-shrinking-footprint-hits-landlords-bottom-line-">Myer’s Shrinking Footprint Hits Landlord Bottom Line</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/7af73f62-c876-4098-a8ca-606f8ba24d9b.jpg" width="900"/></picture><div><span style="align-content:center;opacity:0.8">Scentre has sold a 50 per cent stake in Sydney&#x27;s Westfield Burwood (pictured).</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><br><strong>Scentre offloads 50 per cent stake in Burwood</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Meanwhile, Scentre Group has partnered with Perth’s Perron Group to sell a 50 per cent stake in Westfield Burwood for $575 million.</p><p>The ASX-listed shopping mall giant announced the news in a note on Monday, saying the interest represented a 4.1 per cent premium to the centre’s $1.1 billion book value.</p><p>Scentre Group chief executive Peter Allen said the proceeds will be initially used to repay debt. </p><p>“The proceeds will provide the group with further capital to pursue our strategic objectives of creating long-term value for securityholders,” Allen said.</p><p>The transaction is expected to be dilutive to funds from operations per security by about 0.2 per cent per security over the full year. </p><p>Scentre’s forecast distribution remains unchanged at 22.60 cents per security. </p></div></div></div></div></div>

Melbourne’s Westfield Doncaster is set to become one of the largest shopping centres in the country after its $500 million expansion plans were given 

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The owner-developers of three neighbouring commercial buildings in Melbourne’s CBD have listed the site for $75 million, after canning plans to pursue a 190-key mixed-use hotel project.</p><p>Hotelier and racehorse owner Aziz Kheir, Probuild founder Phil Mehrten and developer Frank Palazzo are looking to offload the site in the western corner of Melbourne’s CBD.  </p><p>The trio secured a hard-fought development approval for a 23-storey mixed-use tower in September last year. The $56 million scheme, designed by architecture firm Hachem, included a bridge connection built over McDougall Lane. </p><p>Kheir, Mehrton and Palazzo acquired the amalgamated site from investment house Hume Partners for $38.8 million in 2015. </p><p>The owners appointed CBRE agents Mark Wizel, Josh Rutman, Lewis Tong and Scott Orchard to sell the three properties, including the historic Sands and McDougall building at 355 Spencer Street.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4a6ca38f-0cc7-4a00-8ac2-99ddb58e095d.jpg" width="920"/></picture><div><span style="align-content:center;opacity:0.8">▲The owners secured development approval for a 23-storey hotel tower on the Spencer Street site.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The 7,363sq m Sands and McDougall building formerly housed the Melbourne publishing house, best known for its annual directories of Melbourne, Sydney and Adelaide. The building was constructed in 1888. </p><p>The agents cited recent transactions including the heritage Swann House at 22 William Street, which sold in late 2019 for $52 million, and the former Don Kyatt Automobiles warehouse, which was picked up by American giant Sentinel for $17 million. </p><p>Private and institutional investor groups are continuing to <a href="https://theurbandeveloper.com/articles/-office-and-industrial-sectors-tipped-for-double-digit-growth-in-2020">pursue Melbourne CBD properties</a> as interest rate cuts create a greater yield spread between rentals and acquisition costs. </p><p>Earlier this month, a freestanding two-level building at 384 Bourke Street <a href="https://theurbandeveloper.com/articles/local-investor-snaps-up-bourke-street-site-on-26pc-yield">changed hands for $22.5 million</a> on a yield of just 2.6 per cent. </p><p>The sale represented 50 per cent uplift on its 2015 transaction price. </p></div></div></div></div></div>