Listed Hong Kong property group CC Land is backing Proprium Capital Partners Australia to fund the purchase of a Melbourne CBD office building.
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 former Esanda building, built in 1998 behind a Parliament train station entrance, is now expected to be retained as an office.
Anton Capital was formed in 2011 by Anthony Kingsley and Tony Martin.
Proprium Capital Partners is a real estate fund manager which came out of Morgan Stanley in 2013. Proprium acquired industrial and residential building group, Investa Land, in 2015.
The Australian reported about the sale of 85 Spring Street to PCPA in this item, in February. Today, it is reporting CC Land’s funding involvement – equating to about 41.9 per cent of the $112 million purchase price.
CC Land made headlines when it 2017 it paid £1.135 billion for London’s tallest skyscraper, a building nicknamed The Cheesegrater (pictured, below).
PCPA and CC Land recently sold a Sydney office at 72 Christie Street, St Leonards, to Singapore’s UOL Group, for $154.5 million, after teaming to buy it, re-position it in the market and fill it with tenants.
It could be the case the investors adopt a similar strategy with 85 Spring Street: the Melbourne CBD office vacancy rate is a low 3.2 per cent, according to Property Council of Australia’s January 2019 Office Market Report.
Jeff Xu’s Golden Age Group and US-based investment firm Starwood Capital Group had intended to develop a $600 million complex on the L-shaped Melbourne block, comprising a 39-storey residential building with 138 high-end apartments and a 26-storey hotel fronting Little Collins Street.
Construction of the complex was expected to start last year, and be complete in 2020.
Golden Age Group paid Grocon $75 million for 85 Spring Street in February 2017. Grocon paid $45 million for it in 2013, later pushing a residential redevelopment proposal through planning.