Melbourne Symphony Orchestra quietly secures Arts precinct site
EXCLUSIVE
The Melbourne Symphony Orchestra has quietly snapped up a prominent site in the heart of Southbank’s Arts precinct until recently earmarked for a 30 level hotel.
The 915 square metre holding – 63-65 and 67-69 City Rd, staring down Southgate Avenue and the Yarra River – cost $13.5 million ex-GST following a deal settling late last year.
The vendor was Collins Street-based Thundering Herd Funds Management which paid Pitcher Partners, liquidator for Malaysia-born Jason Chong’s Cornerstone Partners Group, $10.5m after an expressions of interest campaign in late 2021.
Mr Chong, via a company, Collins McPherson Australia Pty Ltd. picked up the amalgamation for $16.5m in April, 2016 – or $8.25m for each of #63-65 and #67-69.
That group also secured a permit for the 244-suite micro-hotel and, in July, 2019, pre-committed UK-based Yotel – backed by Starwood Capital Group, Al-Bahar Group, United Investment Portugal and Kuwait Real Estate Company – to operate it.
Construction didn’t proceed given COVID; with a bar, club lounge, gym, restaurants, and be activated 24 hours, completion was scheduled early last year.
JLL’s Josh Rutman, Peter Harper, Nick MacFie and Mingxuan Li represented Pitcher Partners.
Options galore for troubled site
Soon after picking up the site, Cornerstone controversially demolished a historic low rise building at #67-69 City Rd despite it being listed as contributory by local planners.
Last year a neighbouring structure on #63-65, with the same classification, was razed.
The MSO drew down $6m from the MSO Foundation to secure the property, which it plans to occupy, relocating from Hamer Hall.
A spokeswoman said it is hasn’t formalised rebuilding plans which could include a low-rise theatre capitalising on the block’s prominent location at the T-intersection of Southgate Ave, near the Southbank Pedestrian Bridge and Flinders Street Station (story continues below).
Another option includes forming a joint venture with a developer and occupying a piece of an office, hotel or residential skyscraper.
Like other not-for-profits, the MSO might also fund a commercial-based project itself, earning rent on portions it doesn’t use. Alternatively, it could offer the completed fully leased asset for sale at a premium when it would be worth most to investors.
Wedged between apartment complexes – Larry Kestelman’s 38 storey Opus tower and Central Equity’s 50 level Focus building – and opposite the 92 floor Eureka skyscraper, the approved shell contains 15,712 sqm.
The news comes a month after Lendlease was announced head contractor for significant upgrades to the Art Centre Melbourne’s Theatres Building and the first steps toward an 18,000 sqm urban garden.
These form part of a $1.7 billion plan to transform the Melbourne Arts Centre precinct. A new museum, The Fox: NGV Contemporary, forms part that proposal.
Elsewhere in the immediate area, Beulah International recently launched a sales campaign for apartments in what is set to be the country’s tallest skyscraper – rising 252 metres.
At 141-151 Sturt St, meanwhile, Cedar Woods is planning a residential project on a 2727 sqm block it acquired for $26.5m last year.
Several Build to Rent towers have been earmarked in the area too including by Novus, which owns a property next to Cedar Woods’ permit-ready for an 18 level asset with 144 dwellings.
Novus recently bought a South Melbourne site overlooking Albert Park Lake for over $25m – also for an investment of this type.
Daniel Grollo’s Home, with GIC, and Altis Property Partners with Aware Super are also intending BTR towers at nearby 6-9 and 50-52 Queens Rd respectively.
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