Super fund developer Cbus Property has sold out and now topped out its $350 million apartment tower on Spring Street, at the ritzy east end of the Melbourne CBD.
The 43-storey tower is around the corner from the ‘Paris end’ of Collins Street, overlooking the parliamentary precinct and Treasury Gardens.
It is one of a new generation of upmarket high-rise apartment complexes which have found niches within the Melbourne CBD itself.
Among them, private developer Grocon is pursuing its own apartment tower nearby on Spring Street.
And further down Collins Street, in its mid-city section,Cbus Property is going ahead with a landmark $1.25 billion mixed use project including several floors of prestige apartments.
The pitch for the top end has paid off for Cbus Property, which sold just two per cent of the stock at 35 Spring Street to offshore buyers.
Designed by Bates Smart, and built by Brookfield Multiplex, the tower was all but sold out within three months of hitting the market.
When complete, it will comprise 246 apartments, held predominantly by owner occupiers, some of whom amalgamated units to create larger apartments.
The average per square metre rate through the tower was between $12,000 and $13,000.
Cbus Property chief executive Adrian Pozzo is unruffled by concerns about settlement risk spooking other sections of the market, as local banks squeeze lending to investors and offshore buyers.
“We’re confident the product will settle at completion in February. We’re not concerned about settlement risk at all,” he said after a topping ceremony last Friday at the Spring Street tower.
“Most of the product has been sold locally, so we’re confident they will settle.”
The Reserve Bank repeated its long-held concerns about a potential apartment glut in Melbourne and Brisbane most recently this month.
Mr Pozzo recognised those risks are real, but said Cbus Property is selling into the safest section of the market.
“If you make a general statement across the board, there could be an oversupply,” he said.
“But if you’re targeting a specific location – it’s all about location, amenity, owner occupier – the demand will be there.”
Mr Pozzo and his team have plenty to keep themselves busy, with launches in Brisbane later this year and of the Collins Arch project at 447 Collins Street in October.
Another $150 million apartment project in leafy East Melbourne, overlooking the Fitzroy Gardens is now 60 per cent pre-sold.
Cbus Property has also joined with Scentre Group to acquire the high-profile David Jones Market Street store in Sydney for $360 million.
A redevelopment of the historic site will deliver fresh retail and commercial space, and as many as 130 to 140 luxury apartments in the heart of the Sydney CBD.
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