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PBL MEDIA has delivered a shock to the property market, announcing it has withdrawn from sale its Melbourne and Sydney television studios.
The network is now expected to inject capital to digitise its Artarmon Road, Willoughby, studios in Sydney's north, and the Bendigo Street, Richmond, studios in Melbourne's east.
This means the network will not lease office space in Docklands or Southbank, where it was believed to have inspected several buildings as potential offices.
When PBL Media listed the properties for sale at the end of last year, institutional developer demand was buoyant, with the two properties at one time expected to have sold for $200million.
But sharemarket volatility and a slowdown in the residential market changed the dynamic this year. It has been reported that Charter Hall lowered its price for the Willoughby and Richmond sites to about $165 million.
Sources say this would have given Channel Nine little change, after costs of about $150million were factored into relocating in Sydney and Melbourne. In a statement to the stock exchange yesterday, Charter Hall joint managing director David Southon said his company was disappointed with PBL Media's decision, particularly as the parties were nearing completion of the negotiating process, which started in December.
"The agreed transactions were fully funded via a combination of equity and credit approval debt facilities," the statement said. "All parties had worked diligently and co-operatively, in every aspect of the process, to satisfy PBL Media's intention to dispose of these properties by 30 June, 2008."
The Channel Nine properties were to be included in Charter Hall's $750 million Charter Hall Opportunity Fund No.5.
"CHOF5 is very well positioned in the current environment, with existing capacity for approximately a further $750 million worth of projects," Mr Southon said.
The Richmond site was to be developed with boutique builder R.Corporation, and Deal Corporation, and include apartments and townhouses built around a heritage-protected red-brick factory. Channel Nine has occupied the site since 1956. Before that, the site was recognised as the Wertheim piano factory.
Parts of the Bendigo Street property, including the prominent red-brick factory, must be retained as part of any redevelopment.
A Channel Nine spokesman declined to comment when contacted by BusinessDay. Part of its decision to move had to do with expensive fit-outs that would allow multi-channel technology by next year. The network will now spend this money at its existing sites.
Colliers International director Rob Joyes, who was marketing the Richmond site with John Marasco, said Charter Hall was still keen to acquire the site if it could agree on the terms.
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