Gurner and Qualitas will take a stake in South Yarra’s Jam Factory, which will be redeveloped with apartments, an office, hotel and more retail.
The incoming owners are speculated will invest about $75 million.
They will co-control the 1.925 hectare asset with Newmark Capital, which paid Challenger $165m six years ago.
In early 2018 the landlord proposed four offices containing 200,000 square metres in the airspace of the historic red brick building – a revamp it was estimated could have increased the holding’s value to $1.25 billion.
Later that year the owner banked $12.6m selling the complex’s multi-level car park to Vicland, which has since built a 10-storey commercial investment.
During COVID it was speculated Newmark was quietly touting the balance of the Jam Factory for sale, for c$200m.
In the suburb, the group also owns The Como Centre.
Ten month ago it paid David Jones $121m for Bourke Street Mall’s outgoing menswear store.
The Jam Factory proposal
The Jam Factory proposal will contain between 550-600 apartments.
The amount of office space is mooted at about 20,000 sqm (story continues below).
A total of 20,000 sqm of retail area is intended.
A hotel is also earmarked; two months ago Gurner unveiled a hospitality brand, Maison, which could be considered at the South Yarra property.
The private developer, and Qualitas, recently committed $150m to a fund chasing distressed sites – and another, for Build to Rent product.
Upon completion it is expected the mixed-use Jam Factory complex would be worth c$1.4b.
Newmark joint managing director Chris Langford said the project will be Australia’s best mixed-use precinct.
“The new Jam Factory will become a signature, vibrant destination for Melbourne,” the executive added.
“Our desire is to restore the status of the Jam Factory and Chapel Street with authenticity, creativity and community at its core.
“This site will be a district that encompasses the needs of the whole community.
“The teams are in discussions with world-leading architects, with appointments imminent.
“The revised planning scheme is expected to be back in front of council by mid-year, launched at the end of 2021 with construction slated to begin in early 2022 and completed by 2025”.