Pallas Capital to ‘Pony Up’ for Fortis Acquisitions

Pallas Capital to ‘Pony Up’ for Fortis Acquisitions

Pallas Group’s Fortis purchased two new sites in two Melbourne CBD city fringe suburbs for $26 million with the aim of creating a premium office and retail offering with end value of $108 million which banks on increasing demand for office space in the two locations

Keeping it all largely in house, Pallas Group as the parent company of Fortis as well as Pallas capital, the non-bank lender provided the funds for the acquisition and development of both projects.

Fortis intends to build and hold the commercial buildings, located in Richmond and South Melbourne, as long-term income-producing assets, with non-bank lender Pallas Capital funding its acquisition and development.

Fortis paid $16 million for the 907sqm site at 1 Little Lesney Street in Richmond—next to another Fortis project, valued at $115 million, being developed at 8 Brighton Street.

A 12-storey tower with 5500sq m of floor space is planned for the site with retail space offering as well. It is expected to yield more than 5500 sq m of net lettable area. Fortis plans to submit a planning application this February and expects to complete the project by the middle of 2024.

The deal was brokered by Collier’s Ben Baines, Ted Dywer and Daniel Wolman.

Mr Baines told Urban Developer that the site’s prime location, with direct access to world-class amenities, was a major drawcard for potential buyers, along with the planning flexibility.

“Although the site was permitted, it represented a genuine opportunity to amend to commercial office, residential apartments and-or hotel”, he said.

According to a report by The Property Tribune Mr Baine said his campaigns for 1 little Lesney street was received by the market successfully, with more than 100 enquiries experience local and international developers of which developers from Asian countries made up the majority of these enquires

Fortis paid $ 10 million in an off-market transaction for the 697sqm South Melbourne site at 122-132 moray street next to the upcoming Anzac Metro station as well as the South Melbourne Market, Church and Coventry streets.

According to the Australian Financial Review, this site is Fortis’ fifth project in the suburb.

A 7-storey site is planned for the site with ground-floor retail and 2,800 sqm of Net leasable Area. The planning application is due to be submitted during the current quarter and the development is set to be completed by late-2024..Fortis director, Charles Mellick, told Urban Developer that, over the past few years, they  have seen an increased demand for premium city fringe commercial offices in Melbourne”.”In an endeavour to harness this opportunity,  our lastest sites in South Melbourne and Richmond will offer a high-end point of difference to the fringe office market and add to our growing half-billion-dollar portfolio of the commercial asset in Melbourne”, he said.

Charles Mellick told Property Tribune that their National commercial portfolio is currently well more than a billion dollars.

According to a report by Urban Developer, Fortis currently has a number of commercial properties in the office fringe market in Melbourne with the total end market value of those being developed or in the planning of $1 billion. It has another $1.25 billion in property in Sydney.

Fortis plans to retain both towers as long-term rental income assets.

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