CBus Linked to $260 Million Collins Street Project

Well-placed industry sources say law firm Allens Arthur Robinson is in advanced negotiations to lease about 13,000 square metres at a yet-to-be-built office building at 171 Collins Street, the former Mayfair Cinema building.

AAR had planned to move to another as yet unbuilt office building at 567 Collins Street – now an open-air car park. But late last year it became evident 567 would not proceed because of a funding shortfall.

AAR is now based at 530 Collins Street. The law firm declined to comment.

After years of protest, the Victorian Civil and Administrative Tribunal granted the owner of the 171 Collins Street site, Macquarie Office Trust, a permit to develop a 17-level, 31,000 sqm office building.

That VCAT decision, made last May, challenged a long-standing strategic vision that the area around the Swanston Street spine should remain restricted to 40 metres high.

Meanwhile, speculation that Macquarie Office Trust is in negotiations to sell the 171Collins Street development site – or at least a large equity share – gained momentum this week.

Sources believe CBus Property, a division of CBus Superannuation Fund, is the most likely purchaser.

Earlier this month, CBus teamed with Dexus Property Trust to develop a $700 million green office building in Sydney.

Representatives from MOT and CBus Property declined to comment.

In the 1980s, 171 Collins Street was redeveloped into a luxury retail arcade, Figgins Diorama, designed to be a competitor to nearby department store Georges.

The venture failed and in 1987 the property was sold at a huge loss to then Harris Scarf boss Sir Donald Trescowthick, who converted the building into "The Shop of Shops" retail arcade.

Macquarie Office Trust paid $27.6 million for the 171 Collins Street building in 2006.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.