Grocon and GIC have picked up a new development site in Docklands following the failure by Chinese group AZX's failure to develop the site under the terms of agreement with the State Government.
Under the terms of the deal, Grocon (with the support of GIC) will pay $67m for the site at 685 LaTrobe Street, adjacent to Etihad Stadium (now known as Marvel Stadium). The land remains subject to a Development Agreement with the State Government which sets out the terms and conditions under which the site can be developed.
There is a conditional planning permit application for the development of this site for two residential towers. AZX had proposed two towers with the taller at 74.5 metres providing approx 629 apartments with a total GFA of 62,614sqm.
AZX Group had acquired the rights to the Docklands development site from Charter Hall for $31.1 million in 2015. In 2018, the AFL agreed with the State Government to invest $225 million into the Docklands precinct redevelopment and to guaranteeing the grand final at the MCG until 2057. At about that time, the AFL agreed to invest $6m into the project at 685 Bourke Street in return for securing parts of the completed project for its own accommodation. With the sale of the site to Grocon, the AFL has advised that it had recouped its $6m investment.
The downturn in the residential market and funding challenges has likely contributed to AZX's inability to progress with the development, though AZX are known for flipping development sites including 189 A’Beckett Street – a 1032 square metre block it bought for $20.8 million in 2015 for $35m.
Grocon are pursuing a build to rent strategy with GIC and will likely look to include this site in their development pipeline.
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