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Melbourne’s once forgotten southern Docklands precinct is set for a development boom, with Macquarie Real Estate Equity Fund, the McMullin Group and Austexx announcing new office projects this week.
The developments include a new high tech business park to be known as Lorimer Place at 880 Lorimer Street in Port Melbourne, and a 13-level A-grade office tower on South Wharf Road.
Both projects will be developed on a speculative basis.
Macquarie Real Estate Equity Fund this week revealed itself as a joint venture partner with the McMullin Group, to redevelop the 2.5 hectare site formerly known as the Citylink Business Park. The McMullin Group paid $17.8 million for the asset off Investa Property Group in March last year and has since cleared the site to make way for the new project.
CB Richard Ellis senior manager Walter Occhiuto, who sold the property to the McMullin Group last year, is marketing the new $52 million business park.
He said the first stage of the project will include 23 office warehouse buildings totalling around 18,000 square metres. Properties will be marketed to owner occupiers and investors with entry level units starting from $760,000.
All properties will include stormwater discharge for landscape irrigation, AAA water fittings and achieve a 4.5-star Australian Building Greenhouse Rating.
McMullin Group managing director Trevor Gorman said the riverfront precinct is being rejuvenated from an historical industrial area to a high-tech business park environment. He said one of the attractions of Lorimer Place is its location, walking distance to the CBD and adjacent to the burgeoning Docklands precinct and the new $1 billion Melbourne Convention Centre.
Meanwhile, developer Austexx has announced revised plans to build a 27,000 square metre office building on a site it owns in South Wharf Road, next to the new convention centre.
The unbuilt development was put to the market last week and is expected to fetch around $160 million. CBRE senior director Martin O'Sullivan, who is marketing the project, said he expects a rental income of around $10 million per annum.
"This is probably one of the last remaining real waterfront properties (in the area), and it's a great location for an office," said Mr O'Sullivan. "With 420 car bays it also has more than double the average amount of parking (for the area)."
South Wharf, which will have a 5 star Green Star and 4.5 star AGBR rating when completed in late 2009, has more than doubled its floor space to 27,000 square metres after plans were scrapped to include six storeys for apartments.
Austexx chief executive Geoff Porz said it thinks there is a stronger market for commercial space than residential space.
The building offers floor plates of 2000 square metres and a four year rental guarantee with four per cent fixed growth. Agents estimate the rent for the A-grade space is about $330 per square metre.
Austexx will occupy one floor of the new building after moving from its St Kilda Road offices, while another has been leased by an undisclosed tenant.
Ownership of the 50,000 square metre retail precinct next door, which will host a homemaker centre in the basement and lifestyle retail outlets on the ground floor, will be retained by Austexx.
Mr Porz denied speculation that Austexx's Spencer Street DFO would be relocated to the South Wharf retail complex. "We'll have some of the same tenants that we've got at Spencer Street, but that's no different then the fact that some of them are already in Southbank and elsewhere," Mr Porz said.
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