The retail space at Melbourne Square s taken up by Woolworths supermarket and six speciality stores (Photo: Yarra Park City)
Yarra Park City’s RM9 billion ($2.6 billion) Melbourne Square has been doing well since it was launched in 2017. With the first stage completed and handed over in March 2021, the developer plans to officially launch the second stage, a residential tower called Blvd, next month.
Blvd, soft-launched in May, has secured about 30% in bookings from the Australian market, Yarra Park City CEO Woon Chong Boon tells City & Country in a virtual interview.
Melbourne Square is a five-acre freehold development located in Southbank, Melbourne. Developed by Yarra Park City, a joint-venture between OSK Property and Employees Provident Fund (EPF), it has a total gross development value (GDV) of A$2.8 billion ($2.6 billion).
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Occupying 0.6 acres, the 73-storey Blvd has 591 units with built-ups ranging from 50 sq m to 177 sq m, and selling prices of A$517,000 to A$3.2 million. Most floors will have 11 units, but levels 56 and above will only have six units on each floor. These are called premium units. The tower has a GDV of RM2 billion and is expected to be completed by 2026.
Two floors will be dedicated to facilities, including an outdoor park, a 25m swimming pool, a spa and sauna, a gymnasium, a simulator room, a cinema and a karaoke room.
Part of level 55 is reserved for residents of premium units, offering a gymnasium, lounge and dining area. On this level, there will be a co-working space that is open to all residents.
With wellness becoming increasingly integral to people’s lifestyles, Yarra Park City plans to enrol in the platinum rating of WELL certification and feature holistic sustainability solutions within the building. It will provide improved insulation in walls and ceilings to provide better thermal and acoustic comfort, electric vehicle charging and smart-home automation, among others.
“We think it is very important as we have seen a trend in the post-Covid-19 world where people are leaning towards wellness. Wellness has moved from a ‘nice to have’ to a ‘must have’ in people’s day-to-day lives,” says Woon.
An artist’s impression of Melbourne Square ... the master plan includes six towers offering residential, retail, office and hotel components. Blvd will be the tallest tower in the project (Picture: Yarra Park City)
The first stage of Melbourne Square, previously an open-air car park space, comprises 1,054 apartments, a 6,100 sq m retail space and a one-acre park. The residential component is almost fully taken up with between 10% and 12% of buyers being Malaysians.
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The retail space is anchored by the 4,100 sq m Woolworths supermarket, six speciality stores and a childcare centre, Nido Early School. Of the six speciality stores, one has been taken up by Woolworths liquor store, BWS; two by an Asian grocery; and one each by a cafe and a restaurant serving Malaysian cuisine. One store is vacant.
Woon shares that Melbourne Square receives about 25,000 footfalls per week, adding that the entry of Woolworths contributed to the growing number. “The surrounding area is [mostly] residential and Woolworths is the only full-line supermarket that we have in the Southbank area.”
He explains that the retail podium was sold to Perth-based real estate fund manager Primewest for A$70 million in December 2020. Primewest, now known as Centuria, appointed Colliers to manage the retail space.
Woon: We have seen a trend in the post-Covid-19 world where people are leaning towards wellness. Wellness has moved from a ‘nice to have’ to a ‘must have’ in people’s day-to-day lives
The original master plan of Melbourne Square consists of six towers offering residential, retail, office and hotel components. Woon explains that the master plan has not been finalised and that there are still 2.1 acres left to develop. “It all depends on the product in demand going forward and we will cater our offering to that demand.”
He adds that there is demand for residential units currently, explaining that there has been a shortage of apartments in Melbourne since the reopening of borders in February last year, which saw a surge in migration into the country. “The estimated number in FY2023 stands at 400,000 of net overseas migration. The estimated number for next year is 315,000. In the next five years, we are looking at 1.5 million overseas migrations. About 40% of those migrants will come to Victoria. So, we are talking about 90,000 per year.”
“These people will need a place to stay, [whether to] rent or buy. So, there is a real shortage right now. The last few years have been hammered by the pandemic, an increase in construction costs and higher borrowing rates, and there have not been many new property launches when compared to the peak years of 2015 and 2016,” he explains.
“The market has changed. We are revisiting [the master plan] and seeing what is the best product to offer,” says Woon, adding that the build-to-rent concept is on their radar as well.
The 73-storey Blvd has 591 units with built-ups ranging from 50 to 177 sq m (Photo: Yarra Park City)
Woon says Melbourne Square will continue to be Yarra Park City’s main focus while it looks to increase its land bank in Australia.
The developer has acquired about two acres in Southbank, consisting of two adjoining sites, for a total of A$97 million. The acquisition of the first site at 87–117 Queensbridge Street was completed in July last year while that for the second site on 190 City Road was completed the following November. The developer has plans to develop a residential project.
“Currently, it is just an office space, which we are leasing out. We have plans for development after we finish Melbourne Square. We are leasing it for investment income at the moment.”
He is positive on the market’s long-term outlook. “Looking at Australia and, in particular, Melbourne, the population growth [in Melbourne] is one of the highest among the Australian cities. We are talking about [an increase of] 1.8% to 2% every year due to [the inflow of] overseas migrants, which include skilled workers and students.”
“With more people coming into Melbourne, more dwellings will be required.”
“The prospects for property are always there, especially in the next five years when an estimated 1.5 million net overseas migrants are coming into Australia. Out of which, some 400,000 to 500,000 will be coming to Melbourne. The [influx] will require additional dwellings to be built, especially when the vacancy rate [in Melbourne], which stands at less than 2%, is very low right now.”
“Therefore, in terms of [residential] development in Melbourne, we are very positive. Hence, it is also the reason why we acquired the [two-acre] sites last year.”
This story first appeared in the City & Country section of The Edge Malaysia (Issue 1491, Sept 25)