Charter Hall snaps up Collins Place with development plan

Towers are set to replace Collins Place’s indoor and outdoor courtyards.

Charter Hall has quietly purchased the freehold to the 1.34 hectare Collins Place complex, in Melbourne’s exclusive eastern core, for $65 million.

The asset will be held by the Prime Office Fund (CPOF) which will now share in the spoils of the significant development upside.

AMP Wholesale Office Fund, control of which soon transfers to Mirvac, retains the leasehold for another 107 years.

That component is presently worth c$1.8 billion.

The 555 Collins Street development will include a multi-level retail component.

The Collins Place acquisition comes a week after CPOF called in GIC as investment partner for the 555 Collins St precinct, in the city’s west – a $1.6b project.

The Singapore sovereign wealth fund also this year teamed with Charter Hall to purchase the Southern Cross complex, on the corner of Bourke and Exhibition streets, near Collins Place.

Elsewhere in the CBD, CPOF is completing the multi-building Wesley Place project on Lonsdale St.

Collins Place

Completed in 1981, Collins Place contains two office towers with a total of 100,000 sqm of area.

Another 40,000 sqm is occupied as by Sofitel as a hotel.

Also with frontage to Exhibition St and Flinders Lane, lower levels are fitted with a dining hall and cinema.

Some tenancies have been renovated but not the popular public eating areas – which form an enormous, undercover courtyard (pictured, top), which CPOF has earmarked for new structures – akin to those which recently replaced the ex-Nauru House forecourt at nearby 80 Collins St.

The significant development upside could boost the asset’s end-value to well over $3b.

CPOF shareholders will share the capital gain.

The fund has earned an 12.2 per cent internal rate of return over 10 years (story continues below).

UBS recently pre-committed to the proposed South Tower at Chifley Square.

Charter Hall is Sydney based.

Charter Hall expands Melbourne footprint

Charter Hall managing director and chief executive officer, David Harrison, said Collins Place represents a unique opportunity for CPOF investors to secure one of the largest, freehold title, prime CBD sites nationally.

“We have long recognised the value of freehold land and precincts, demonstrated by the 2019 purchase of Sydney’s…Chifley Tower and the subsequent planning process to develop a complimentary South Tower to the existing North Tower,” he added.

“Charter Hall’s strategy, to unlock under-utilised floorspace in prime locations that have the potential to add value to the freehold asset over time, ultimately delivers long term value,” according to the executive.

“Equally, at a modest plot ratio of approximately 10:1, we believe Collins Place is significantly under-utilised compared to nearby precincts such as 80 Collins St, which secured approval to develop an additional tower to complement the 50-storey Nauru House, to create…20:1”.

Down the road [555 Collins St], the developer said, it won approval for a two-tower, 86,000 sqm project, on a 3300 sqm block, equating to a 24:1 plot ratio.

Colliers’ Adam Woodward brokered the Collins Place sale for an undisclosed institutional investor.

Eastern core building boom

Charter Hall will now compete for tenant clients with Dexus, which controls 80 Collins St and the ex-Reserve Bank of Australia headquarters [60 Collins St] which was recently permitted for a 26 storey office tower.

In June, Pelligra acquired the airspace of Anzac House at 4-6 Collins St, as part of its purchase of 85 Spring St, on which it is also planning two commercial towers.

The CPOF portfolio is now worth over c$9.6b.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of