$2.8b six-tower project kicks off in Melbourne

$2.8b six-tower project kicks off in Melbourne

30 March 2018

In one of the largest single development proposals ever put to the state’s planning authorities, Malaysia’s OSK Property has begun the first residential stage of $2.8 billion mixed-use project in Melbourne’s Southbank, reports the AFR.

The six-tower project is a joint venture between Malaysian pension fund, Employees Provident Fund (one of the largest such funds in the world), and the property arm of OSK Group, a conglomerate with interests in banking, construction and hospitality.

Four Asia-based banks will finance the massive project after local lenders baulked at the risk, said OSK executive chairman Tan Sri Ong Leong Huat.

“Much as we want to use the Australian banks here, but in recent days the Australian banks say they are very restricted in financing development projects, especially (with) foreign investors coming in,” Mr Ong said.

“So they are rather careful in doing that. But we have global banks. They say ‘Your company is very progressive, your balance sheet is good, you’re very experienced. Okay. We can fund you, go and do it’.”

The Australian reports Mr Ong dismissed concerns about an oversupply of inner-city apartments, highlighting strong migration to Melbourne from within Australia as well as from overseas.

The first stage of the project includes 1,048 apartments in two towers and a shared podium, with one-bedroom units starting from $409,800 and penthouses starting from $1.86 million.

The developer has seen $450 million in stock snapped up since launching to market last month, with 451 apartments selling for a total $450 million, says The Urban Developer.

Four of the 20 total penthouses, ranging in size from 220sqm to 600sqm, have sold for $11.9 million.

Designed by Cox Architecture, almost a fifth of the huge site will be devoted to public realm with a park, a shopping centre, childcare facility, and specialty stores.

The Malaysian developer paid a record $145 million to acquire the city fringe site in June 2014 from interests associated with the Mario LoGiudice’s Banco Group.

Multiplex is constructing the first stage. When complete, the entire project will have 2,600 apartments, a hotel and serviced apartment tower, a commercial office building, as well as Woolworths’ first full-line supermarket in Southbank

Mr Ong hopes Melbourne Square will be one of the first distinct impressions of the city for visitors arriving from the airport who exit the tollway near the OSK development.

“This will be the symbol, the landmark. That is our vision.”

The completion of stage one is expected by August 2020.