Rialto’s million-dollar views at risk following Charter Hall buying 555 Collins Street

Fragrance Group’s proposed residential redevelopment of the site is now canned.

Charter Hall has expanded its footprint at the south-west corner of Collins and King streets, in the Melbourne CBD, following an off-market deal.

Charter Hall’s Prime Office Fund is paying $140 million for 555 Collins Street, a rundown 24-storey former government office built in the 1960s and for years known as Enterprise House (pictured, top).

It already owns the neighbouring property – 55 King Street (pictured bottom, right) – which rises eight storeys.

Following its latest purchase, Charter Hall controls a combined 4620 square metres of land in this pocket.

Knight Frank’s Paul Henley and Scott Newtown brokered the deal for the vendor, Singapore’s Fragrance Group, which had planned to rebuild 555 Collins Street as a residential project (artist’s impression, left).

Instead, Charter Hall will now turn the corner into an office complex, according to various reports.

It is unknown if one office tower will utilise the entire holding. The land could make way for more than one structure.

55 King Street with 555 Collins Street in the background.

The block is opposite the landmark Rialto Towers – for years Melbourne’s tallest skyscraper. Any high-rise development by Charter Hall will rob westerly views currently enjoyed by Rialto office occupants.

At the opposite end of the city recently, Dexus paid $230 million to create a circa 2000 sqm land holding at the corner of Collins and Exhibition streets. It paid $160 million for the Reserve Bank of Australia building at 60 Collins Street, following a public campaign. It also spent $70 million on the neighbouring property – 52 Collins Street – following an off-market negotiation.

Early this month we reported that South Korea’s National Pension Service was selling 595 Collins Street, near the former Enterprise House. On about 4000 sqm of land, 595 Collins Street is expected to trade for more than $300 million following the campaign being managed by CBRE’s Neva Courts and JLL’s Luke Etherington, Nick Rathgeber and Paul Kempton.

 

Marc Pallisco

A freelance property writer and analyst, Marc is a co-founder of realestatesource.com.au.

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