Coombes Property Group and Mirvac have obtained planning approval for a 270metre residential tower on the old Cinema complex site in George Street, Sydney. But will it get started ?
If built, the landmark project will becomes Sydney's tallest tower and will contain 507 apartments, including luxury serviced suites, a rooftop restaurant and bar, a boutique cinema, retail, conferencing facilities, a childcare centre and a meeting room facility for Council.
Coombes Property Group is the landowner and developer of the project and consistent with their business model, the Group will retain development control of the project, inviting Mirvac to assist with coordination of design and delivery.
The tower is to be built alongside another project at 525-529 George Street in which the Events Group has proposed the demolition of the existing buildings and the construction of a 150-metre tower with 12 levels of residential, 22 hotel levels and a new cinema and retail facilities in the ground floor and podium levels. The development application for this project is still being assessed by the City of Sydney.
Coombes Property Group acquired the 4,308sqm site in 2009 from Challenger Financial Services for $85m and have spent the last 4 years securing a development approval for the site.
Coombes Property Group, Director Michael Coombes said the project has the potential to redefine Sydney’s Mid-City precinct and help restore George Street as the thriving focal point of the city centre and main CBD thoroughfare.
“With its prominent location at the city’s southern gateway and its distinctive design, 505 George St will become a new icon for the city skyline. Its delivery will signal the resurgence of Sydney’s Mid-Town, revitalising the historic precinct which includes the adjacent Town Hall complex, and bringing it back into line with nearby Darling Harbour and Circular Quay, by making it a global destination in its own right.”
505 George Street is aiming to be Australia’s tallest residential tower to receive a 5 Star Green Star Design and As-Built rating from the Green Building Council of Australia. The scheme also includes plans to improve pedestrian connectivity at ground level by linking George Street and Kent Street, as well as significantly enhancing the existing streetscape.
There have been few residential towers of this scale built in Australia. The current top 4 are;
- Melbourne 108 Tower – due for completion in 2020 is 320m high & 100 floors
- Brisbane Skytower – completed in 2019 is 274m high & 88 floors
- Gold Coast Q1 Tower – completed in 2005 at 245m high (ex spire) & 78 floors
- Brisbane The One Residence – due for completion in 2020 is 274m high & 85 floors
Capital Management Australia managed the capital requirements for the $600m Brisbane Skytower for developers AMP Capital and Billbergia. From their experience, an extensive shedding of risk to minimise construction, funding & financial issues throughout the development process was fundamental to its success. Coombes Property Group will need to follow their lead in order to achieve success in George Street.
Whilst the challenges of building a tower of this scale are well known to most tier 1 and 2 D&C contractors (particularly building in high wind zones and above railway tunnels), the funding and sales process will challenge the start of the project.
Prior to commencing construction the Group will likely need to secure sufficient pre-sales to support a debt funding package, a task made much harder following the COVID19 implications.
Investor sentiment towards off the plan sales was already much lower following banking restrictions on investors in 2018, reduced foreign demand and more recently following concerns about build quality and defect rectification issues. Adding to this now is the COVID19 restrictions on international visitations and potential falls in rentals.
The Coombes project will be up against the residential towers being developed in Barangaroo which sit on the edge of the city amongst an engaging & liveable precinct.
Of course, limited sales and funding can be overcome. The One Brisbane was developed without pre-sales, but with substantial equity support from its Taiwanese developer, Shayher Group, part of the Par Jar Group.
If Coombes Property Group can proceed as Shayher have, then the project is likely to proceed in the coming year or so, if not, it may be sometime before cranes are erected on this site.
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