Lendlease to win $1b Queen Victoria Market project
Lendlease is set to take on a $1 billion-plus mixed-use development at Melbourne’s Queen Victoria Market, having secured preferred tenderer status for the so-called Southern Site project.
The developer beat shortlisted rival Brookfield to secure the development on the 11,892-square-metre site at the southern end of the seven-hectare market precinct, sources told The Australian Financial Review.
Lendlease declined to comment, referring all queries to the City of Melbourne, which owns the market. Lord Mayor Sally Capp said a process to sell the site created by the realignment of Franklin Street and incorporating a row of historic stores was under way.
“The City of Melbourne will share further details on the outcome of this process once it has concluded,” Ms Capp said.
“The development will contribute more than $1 billion in value to our economy.”
An announcement is some months away, but the mayor’s comments indicate the project has more than doubled in value since it went to tender in June last year, described then as a $520 million project that would develop some 600 residential units.
The end value of the project could be about $1.2 billion, sources said.
“This is one of Australia’s best development opportunities that may never be repeated in the city again,” Deputy Lord Mayor Nicholas Reece said.
The southern site, which according to the city’s master plan is due to complete redevelopment in September 2026, will be created by extending Franklin Street along the northern edge of the site through to Dudley Street to create a new vehicle route to Docklands.
Under a 2014 agreement, the Victorian government will transfer 7602 square metres of Crown land at the southern end of the site to the city, which will be sold to the developer.
Documents show the heritage-listed Franklin Street Stores buildings – which will be restored and made available for the city’s use as retail or hospitality space – along with the former Crown land will make up the site area.
Up to 25 per cent of the housing to be developed in the project is due to be made available as affordable dwellings and the project will also create a new public car park for the market with between 220 and 500 spaces. This will make up some of the 720 parking spaces lost by conversion of the existing open-air car park into public space.
It is not yet clear whether Lendlease will develop traditional for-sale apartments or build-to-rent housing – or a combination of both – in the project. Last month, Lendlease chief executive Tony Lombardo said the company, which has not yet started any BTR projects in Australia, would include the housing type at its Melbourne Quarter project.
The southern site development is the final part of the planned wider redevelopment of Melbourne’s 140-year-old produce and merchandise market precinct.
Last week, hotel operator Veriu opened its first Melbourne hotel, the 110-room Veriu Queen Victoria Market facility, in a separate part of the wider market development, the 6329-square-metre so-called Munro site, which also includes new car parks to offset the future loss of the open-air site.
Earlier this month, Mirvac also opened its 490-unit LIV Munro build-to-rent development on the site. The $355 million project is the developer’s first BTR project in the Victorian capital.
