The Collin’s Square project initiated by the Walker Corporation is due for completion by the end of 2017. Nevertheless, it already boasts of some high profile tenants in the completed sections. The brain behind this giant project is Lang Walker. A few days ago, Mr. Walker announced that Collin’s square located in Melbourne’s docklands was up for sale at a price of $2.5 billion.
Collin’s square Status
This came as a surprise too many investors as Collin’s Square project is just half way through constructions. Presently, there are two towers that have been completed. Two more are expected to be ready by 2016 while the final tower is scheduled for completion by 2017. It is expected that the complete tower should be able to have at least 25,000 square meters of space to let with at least 45,000 persons working at or visiting the location per day. The first two towers that are already completed are already hosting tenants. Some recognizable names that have taken up space at the towers include; Mott McDonald, KPMG and Maddocks.
According to Mr. Walker, the decision to sell was influenced by the numerous offers he had been receiving for the sale of Collin’s Square. The property developer is making the most of the property boom by selling ahead of a suspected peak in real estate sales. The deal, if it goes through, is expected to bring in a return of about 5% on income.
Walker Corporation has enlisted the services of UBS AG. UBS AG will be charged with marketing the project to interested investors both at home and abroad. They will also be in charge of conducting the sales. The head of UBS real estate division, Tim Church, said assets like Collin’s Square will be well sought after in sustained low interest environments. He also mentioned that with capitalism spreading to the ten year government bond rate, securely leased assets have great capacity for growth. For the sale, UBS will target only one buyer and the sale is expected to go through some time in 2016.
Worthy of note is the fact that this year has seen some major record breaking sales being made in the Australian real estate market. The announced eminent sale of Collin’s Square is coming just months after the purchase of Investa Trust Property Portfolio by the Chinese Investment Corporation for a whopping $2.45 billion. If the sale of Collin’s Square goes through at the expected $2.5 billion, it will be the biggest real estate deal for the year 2015.
It is worth noting here that Collin’s Square is not the only project Walker Corporation is involved in. The company has a $25 billion pipeline project that has to be developed over the next ten years. This pipeline project also includes the $1.5 billion Parramata Square project which drew interest from other developers like Dexus Property Group and Charter Hall. Other projects in which the group is involved include projects in Canberra and the Adelaide Festival Center development project.