This article is from the Australian Property Journal archive
JAPANESE real estate company Daibiru is backing a rebound in the Melbourne CBD office market, investing a 50% share in Mirvac’s 46,000 sqm under-construction tower at 7 Spencer Street.
Touted as a “next generation workplace” development, the 21-level complex will feature over 10 individual terraces, making the most of the Yarra River views and abundance of natural light. Near the corner of Flinders Street, the site is part of the emerging Northbank precinct, which includes Mirvac’s second build-to-rent property in Melbourne, LIV Aston, marked for completion in mid-2024.
Mirvac bought the former Melbourne Convention Centre site at 7-23 Spencer Street late in 2019 for about $200 million from Century Group Australia. At the time, the site had been earmarked for an $800 million three-tower apartments and hotel project. Mirvac instead opted for office and build-to-rent towers.
Its in-house design and construction teams have commenced works on the office project, which is expected to create 250 new jobs, in addition to the 330-strong workforce at the build-to-rent project.
“Building a strategic relationship with a high calibre investor like Daibiru, is consistent with our funds management strategy to sell down an interest in our assets to strategically aligned, long-term investment partners,” said Mirvac’s group CEO and managing director, Campbell Hanan said.
“We are delighted to partner with Daibiru, a respected Japanese commercial property developer and owner, to deliver 7 Spencer, with both our companies committed to creating great quality, future-proofed workplaces of the future.”
The City of Melbourne expects the new Greenline renewal project and greater Northbank precinct to attract more than 1.1 million additional visitors annually.
Mirvac is shirking doubts about the future of the office. A big part of the Melbourne CBD vacancy story has been new supply; vacancies have increased to 13.8% after a wave of new stock arrived in the early 2020s, while the sector also grappled with hybrid working. Property Council of Australia data shows another 220,000 sqm of new space is expected in the CBD over the next two years.
Daibiru is a subsidiary of Japanese transport giant Mitsui O.S.K. Lines. The $1.16 trillion conglomerate headquartered in Toranomon, Minato, is one of the largest shipping companies in the world.
Representative director and president CEO of Daibiru Corporation, Takashi Maruyama, said, “We are very pleased to partner with highly reputable real estate developer Mirvac to develop 7 Spencer Street as an optimum project”.
“Our vision to develop top-notch office buildings on the premise of long-term ownership is aligned with Mirvac’s, so we believe that we can enhance our partnership in many years to come.”
Fronting the Yarra River and waterfront parkland, the fully electrified 7 Spencer will target a 5 Star Green Star rating, 4.5 Star NABERS Water rating, 5.5 Star NABERS Energy rating and a Gold WELL Core and Shell rating.
The 7 Spencer Street project follows Mirvac’s delivery of the 58,000 sqm, $800 million-plus Olderfleet office building on Collins Street, into which it brought in Suntec Real Estate Investment Trust during construction.
On the other side of the CBD, Mirvac is developing its LIV Munro build-to-rent project overlooking the Queen Victoria Market.
