Cbus Property has launched its $1 billion Collins Arch development, turning the first sod on its luxury apartment, office and five-star hotel project in Melbourne yesterday.

The development will deliver a new park to the city — part of 2000sq m of public open space — set on the corner of Collins and Market streets.

The yet unnamed park will take up half of Market Street, and Collins Arch’s forecourt will spill over into another inner-city pocket park.

The 39-storey towers, joined by a skybridge housing apartments, is on the old Western Market site. The project was initally rejected by Victoria’s Minister for Planning, Richard Wynne, as it overshadowed the Yarra River.

Cbus Property chief executive Adrian Pozzo said the launch was a “milestone” for the 11-year-old company, three years after Cbus Property acquired the Collins Street site from unlisted property fund managers ISPT for $100 million. “Collins Arch will be a vertical village within the city that will transform our skyline. A flourishing destination drawing people from across the city, Collins Arch will be a place for thousands to live, work, play and stay,” he said.

SHoP Architects principal William Sharples — whose New York firm won a global design competition for the development and will work alongside local firm Woods Bagot — said the project’s success came down to the “beauty of the site” and collaboration between stakeholders.

“You always hear Melbourne is the world’s most liveable city — well, it’s true, and these are the ingredients for us to really move the architecture forward,” he said. Mr Wynne said yesterday’s launch was the result of a “wonderful compromise” between himself and Mr Pozzo.

“Adrian and I have had some interesting conversations over the journey, it’s not been an easy one,” he said.

The final development spans 6000sq m with 202 luxury apartments in total, with three-bedroom apartments and penthouses starting at more than $1.5 million.

Collins Arch will also be home to a 294-suite five-star hotel on the first 15 levels of the eastern tower.