Mirvac pays $200 million for ex-Melbourne Convention Centre plot, proposes Build to Rent project

Artist’s impression of the St Regis hotel earmarked for Melbourne.

Mirvac Group (MGR) is paying $200 million for part of the former Melbourne Convention Centre site at 7-23 Spencer Street, between Sidderley Street and the Yarra River, at the city’s south west tip.

In a deal announced on Christmas Eve, MGR said it had earmarked a 430-dwelling Build to Rent project for part of the land.

A 40,000 square metre office tower with large floorplates of about 2000 sqm is also proposed.

The vendor was Century Group Australia which plans to retain part of the site to build a 168-suite hotel which will be occupied as Australia’s first St Regis.

Another new future for Melbourne Convention Centre/Melbourne Congress Centre site

A joint venture between China Century Group and Exhibition and Travel Group, CGA paid another Chinese developer, Nuway Wy, $97 million for the 4500 square metre 7-23 Spencer Street plot in 2016.

At the time the parcel behind Crowne Plaza was permitted to make way for a residential village containing 1100 dwellings within three towers.

Instead CGA obtained a permit to replace the block with an $800 million mixed-use development – marketed for most of last year as Flinders Bank (artist’s impression, top).

MGR is acquiring part of the Spencer Street site which CGA had earmarked for apartment complexes containing 500 luxury units.

Flinders Bank was also set to include a 2100 sqm shopping centre

The high-profile holding – also once known for housing the Melbourne Congress Centre – contains offices once part-leased to Crown Casino while that occupier’s premises was being developed nearby on the Southbank side of the Yarra River.

The pocket is in a unique location connecting the Melbourne CBD with master-planned urban renewal precincts, Docklands and Southbank.

Not far west from 7-23 Spencer Street, Riverlee is developing a $450 million project with apartments and a 1 Hotel on the Seafarers Mission site it is marketing as in Northbank.

In mid-2017, education entrepreneur, developer and philanthropist Shesh Ghale outlaid a speculated $30 million for the historic former Sir Charles Hotham hotel, at 2-8 Spencer Street.

MGR brands precinct Flinders West

MGR expects to settle on the purchase of 7-23 Spencer Street within 18 months from March, 2020 (so up until August, 2021).

But it has already branded its proposal as Flinders West.

MGR expects to complete construction within three to five years after seizing ownership.

“This site provides us with an opportunity to add to our high-quality Melbourne office portfolio and grow our burgeoning build-to-rent portfolio in a location supported by strong transport links, ongoing infrastructure investment and favourable demographics,” the company’s chief executive officer Susan Lloyd-Hurwitz said.

The developer will now seek planning approval for the 7-23 Spencer Street project.

The purchase comes a month after MGR snapped up a major site in Melbourne’s northern suburb of Brunswick – also for a BTR project.

Last June Mirvac paid PDG Corporation $333.5 million for an unbuilt (and at the time unpermitted) 38-storey build-to-rent tower with 490 flats.

It is also building a project of this type at Sydney’s Olympic Park.

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Marc Pallisco

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

Marc Pallisco