Singapore’s ARA Asset Management with the backing of Canadian institutional investor, QuadReal Property Group, has acquired East Melbourne’s as-yet-unbuilt Victoria Place office on a funds-through basis.
The 200 -216 Victoria Parade site is reported to be selling for about $70 million – with the pair to then finance construction, which will be overseen by Time & Place, one of the vendors.
Upon completion in 2022, ARA Australia chief executive officer, David Bligh said, its office will be worth more than $300 million.
A value of $328 million was later firmed up by well placed agency sources.
Time & Place paid National Australia Bank $60 million in 2016 for the former data centre blocks set to make way for Victoria Place.
Private investor Jeff Xu’s Golden Age Group later bought into the project as a joint venture partner.
Despite the potential for the site to be replaced with an apartment building, Time & Place sought permission for an 11-level, 26,300 square metre commercial complex.
Agents launched a leasing campaign for the oversized office floors, last year.
Last June it was reported Time and Place and Mr Xu were touting the project for sale off-market.
As well as a straight sale, a variety of capital structures – including the funds through which eventuated – were mooted.
Melbourne a focus for our global cities strategy: QuadReal
QuadReal managing director, Asia, Peter Kim, told IPE Real Assets in this item “Melbourne is a key focal point for our global cities strategy”.
“The city has a growing population and market watchers expect Melbourne to surpass Sydney as Australia’s largest city by 2026.
“There is a lot of organic and international movement patterns helping drive that population growth”.
QuadReal is the real estate arm of British Columbia Investment Management Corporation.
It first teamed with ARA last year to acquire a portfolio of commercial assets in Sydney and Melbourne.
Mr Kim said he expects the pair’s portfolio to become weighted with more office and industrial assets over the next three to four years.
Again, these assets will be in Sydney and Melbourne.