Hong Kong property group CC Land is backing Proprium Capital Partners Australia to acquire a Melbourne CBD office.
PCPA – which formed in 2017 when Goldman Sachs backed Anton Capital merged with Proprium Capital Partners, is paying $112 million for 85 Spring Street, after attempts by the vendor to rebuild the site as a luxury apartment project and hotel recently fell through.
The 16-storey ex-Esanda building, built in 1998 behind a Parliament train station entrance, is now expected to be retained as a workplace.
Anton was formed by Anthony Kingsley and Tony Martin in 2011.
Proprium Capital Partners is a manager which came out of Morgan Stanley in 2013.
Proprium acquired industrial and residential builder Investa Land, two years later.
The Australian reported about the 85 Spring St sale in February.
CC Land owns 49pc
CC Land’s funding involvement equates to about 41.9 per cent of the purchase price (story continues below).
The listed group made headlines when it 2017 it paid £1.135 billion for London’s tallest skyscraper, dubbed The Cheesegrater (pictured, below).
It and PCPA recently sold a Sydney office at 72 Christie St to Singapore’s UOL Group for $154.5 million, after re-position and finding tenants for it.
The investors could adopt a similar strategy at 85 Spring St: the Melbourne CBD office vacancy rate is a low 3.2 per cent, according to Property Council of Australia.
The old plan
Jeff Xu’s Golden Age Group and US-based Starwood Capital Group intended a $600m complex at the L-shaped Spring St block; it would have contained a 39-storey tower with 138 units and a 26-floor hotel fronting Little Collins St.
Construction was expected to start last year and be complete in 2020.
Grocon won permission to replace the site after paying $45m for the block in 2013.
It flipped it to Golden Age for $75m in February 2017.