AMP Capital’s Select Property Portfolio No.3 (SPP3) has now commenced construction at 111 Mary Street, Brisbane after forming an equity joint venture with Billbergia.
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.
AMP Capital Select Property Portfolio Fund Manager Warwick Petschack said 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,” Mr Petschack said.
The site has Development Approval for a 35,000 square metre 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. AMP Capital is working with Billbergia on a revised design of the mixed use tower to enable construction to commence earlier than expected.
“This is a solid investment opportunity for our investors. 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 Street 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.
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 on the Brisbane project.
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.