Japanese property investors are again putting their stamp on Australian property markets, with real estate house Daibiru backing a $630m office project in the Melbourne CBD.
The Australian revealed today that the builders and miners industry associations are getting ready to fight Tony Burke’s same job, same pay legislation, says Sky News Political Editor Andrew Clennell. Mr Clennell said the legislation threatens to “stop businesses outsourcing labour”. “Could this have a deleterious effect on an already strained Australian economy?”, Mr Clennell said.
Big Japanese companies have returned to Australian property in force after suffering heavy losses as the bubble economy burst, and they sold off their offshore holdings, with names ranging from Sekisui House to Mitsubishi now common in deal-making.
But their spending differs dramatically from the luxury hotels and golf courses they developed in the 1980s with the current focus on commercial office towers, luxury residential apartments and construction, as well as home building, most often in partnership with well-credentialed Australian companies.
In the latest play, Japan’s Daibiru has unveiled a strategic relationship with listed developer Mirvac, which is investing in a 50 per cent share of its next generation office development in Melbourne, 7 Spencer Street.
Mirvac’s in-house design and construction teams have already kicked off works on the project, near the corner of Flinders St, on the edge of the CBD. Building the offices is expected to create 250 new jobs, in addition to the 330-strong workforce at Mirvac’s neighbouring LIV Aston build to rent project.
Billed as a “workplace of the future”, the 21-level 7 Spencer Street, will span about 46,000sq m of floor space, and will feature over ten individual terraces, making the most of the Yarra River views and abundance of natural light. The site is part of Melbourne’s emerging Northbank precinct, with the build to rent property marked for completion in mid-2024.
Mirvac chief executive Campbell Hanan said the firm would partner with Daibiru, the well-known Japanese commercial property developer and owner, to deliver 7 Spencer, with both companies committed to creating “great quality, future-proofed workplaces of the future”.
“7 Spencer Street is the integral final project in the creation of an exciting new true mixed-experience precinct, bringing together a world-class modern workplace, build to rent apartments at LIV Aston, and quality retail and amenity, all located in Melbourne’s emerging Northbank precinct,” he said.
The newly-installed Mirvac CEO has flagged plans to bolster the company’s funds unit as a way of getting more projects going.
“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,” Mr Hanan said.
Daibiru Corporation president CEO Takashi Maruyama said the Japanese company was partnering with 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. We look forward to creating innovative and attractive workplaces together with Mirvac,” he said.
Fronting the Yarra River and waterfront parkland, the fully electrified 7 Spencer development 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.
Mr Hanan said the project was a milestone for Mirvac’s growth in Melbourne and followed its overhaul of the Olderfleet office building on Collins St.
Mirvac bought the former Melbourne Convention Centre site from Century Group Aus for about $200m in late 2019. The Spencer St site then carried plans for a $800m triple tower complex, to be made up of more than 500 apartments and 168 luxury hotel rooms.
But Mirvac won approval to create a mixed-use “urban neighbourhood”, including the office complex and the build to rent tower of about 472 apartments in 2021.
The latest deal was struck after the site was brokered by real estate agencies Knight Frank’s Ben Schubert and Trent Preece and Cushman & Wakefield’s Leigh Melbourne and Nick Rathgeber.
Daibiru has invested in Australia before, and in 2018 struck a $240m deal with John Holland to fund a prime office development at 275 George St in the Sydney CBD.
That was the Japanese firm’s first foray into the Australian property market, with the 18-storey building now a prime part of the precinct around Wynyard station.
Daibiru has a network of buildings in Japan that span offices, hotel buildings, and retail complexes in Tokyo and Osaka.