Daibiru buys into ex-Melbourne Convention & Exhibition Centre redevelopment

The Civic, or 7 Spencer Street, will contain 46,000 square metres over 21 levels.

Japan based real estate giant Daibiru Corporation has bought a half stake in a c$660 million fully electric office under construction on part of the ex-Melbourne Convention & Exhibition Centre.

Australia’s first St Regis was earmarked for the Melbourne site.

The off-market deal was with Mirvac, which will retain the balance.

Over 21 storeys, the asset will contain 46,000 square metres, upper levels capturing Yarra River views.

Mirvac is also developing a 32 level, 492 unit Build to Rent tower on the ex-MCEC block at 7-23 Spencer Street, on the south west corner of Flinders, which it bought for $200m in 2019.

That seller, China Century Australia and Exhibition & Travel Group, offered the c4500 sqm holding permit-ready for an $800m project with two apartment towers and a hotel – the country’s first St Regis.

The property was also being marketed as Flinders Bank.

Mirvac instead redesigned the hospitality and buy-to-sell residential component as offices and retail, launching a leasing campaign in 2021.

Cushman & Wakefield’s Leigh Melbourne and Nick Rathgeber with Knight Frank’s Ben Schubert and Trent Preece brokered the Daibiru sale.

7 Spencer Street

To be known as The Civic or 7 Spencer St, the Daibiru/Mirvac building forms part of the Northbank precinct, over the river from Crown Casino.

“We are delighted to partner with Daibiru, a respect Japanese commercial property developer and owner, to deliver 7 Spencer St with both our companies committed to creating great quality, future-proofed workplaces,” Mirvac chief executive officer and managing director, Campbell Hanan, said.

“7 Spencer St is the integral final project in the creation of an exciting new true mixed-use experience precinct bringing together a world-class modern workplace, Build to Rent apartments at Liv Aston and quality retail and amenity,” he added.

“With the new Greenline project and greater Northbank precinct tipped to attract more than 1.1 million additional visitors annually, we look forward to creating a vibrant hub that brings great businesses and workforces together, where retailers will thrive and residents have the opportunity to live in a new mixed use precinct closely connected to transport and other amenity,” according to the executive (story continues below).

Mirvac recently sold 367 Collins Street (marked).

“Building a strategic relationship with a high calibre investor like Daibiru is consistent with our funds management strategy to sell down an interest in our assets to strategically aligned, long-term investment partners”.

Mirvac’s proposed office at 383 La Trobe Street.

The deal comes a month since we reported Mirvac sold the Optus Centre, at 357 Collins St, for $400m.

In 2020, meanwhile, Mirvac completed a 58,000 sqm office at 477 Collins St, just over half of which is occupied by Deloitte.

Before this building was complete, the company sold a 50pc interest to Singapore’s Suntec REIT.

Mirvac is also planning offices at 383 La Trobe St, beside the Royal Mint.

Daibiru invests again in Australia

The 7 Spencer St deal comes five years since Daibiru paid John Holland c$240m on a funds through basis for a 15 storey office at 275 George St, Sydney, completed in 2020.

“We are very pleased to partner with highly reputable real estate developer Mirvac to develop 7 Spencer St as an optimum project,” Daibiru chief executive officer Takashi Maruyama said.

“Our vision to develop top-notch office buildings on the premise of long-term ownership is aligned with Mirvac’s so we believe…we can enhance our partnership in many years to come,” he added.

“We look forward to creating innovative and attractive workplaces together with Mirvac,” according to the executive.

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Marc Pallisco

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