This article is from the Australian Property Journal archive
AMP Capital has construction on the former Austcorp Vision development site at 111 Mary St Brisbane, after forming an equity joint venture with Billbergia.
Launched in 2006, the site was originally earmarked for a $1 billion 90-storey residential apartment and office tower but was shelved in 2009 when Austcorp suffered a funding crisis. And in 2010 the AMP Capital’s Select Property Portfolio No.3 chipped in money to help Billbergia grab the site for $40 million and took a stake in the project as well in exchange for the debts owed.
AMP Capital Select Property Portfolio fund manager Warwick Petschack said activity on the site, which has lain dormant for the past five years, is viewed as a significant event in the Brisbane CBD by the market.
“The fund now holds a majority interest in the former Vision site.
“We are very pleased to deepen our involvement in the project, having held a senior debt position and working with Billbergia on development schemes for the past 18 months. Our strategy of building up a position in the project reflects our conviction of strong growth opportunities in the Brisbane market,” Petschack said.
The new vision is for a 35,000 sqm A grade office building in one tower and a 400 room ‘5 star’ hotel along with a further 850 apartments in a second mixed use tower.
Petschack said the changes reflect the changes in Brisbane’s CBD.
“Our view is that demand from tenants and institutional investors for new A grade office space in the Brisbane CBD will continue to remain strong. Combined with this, 111 Mary St is likely to be the only new A grade office building capable of being delivered in 2015.
“Furthermore, the lack of 5 Star hotel accommodation in the Brisbane CBD also provides a compelling investment proposition. Earlier this week, the Queensland State Government and Brisbane City Council released their Hotel Investment Guide pointing to the significant shortage of hotel space in the city along with the growing demand for higher quality accommodation. The state government have outlined a suite of incentives to assist the sector without which new hotel accommodation is difficult to justify,” he continued.
The joint venture has appointed Hutchinson Builders to construct the eight level car park within the existing excavation which is due for completion within 12 months. Construction of the office and mixed use towers will commence once a suitable pre-commitment has been secured.
Billbergia has a strong civil works and construction background and will be appointed as the development manager.
Petschack said the AMP Capital and Billbergia relationship is proving to be a successful partnership with a separate project at Wentworth Point in Sydney ahead of schedule.
Property Review
