Commercial Property Grocon wins $55m project

Herald-Sun Business Daily
Nicole Lindsay
27 October 2009

Grocon will develop a new $55 million government office building in Dandenong as part of the city's urban renewal program.

The building, destined for a 2500sq m site on the corner of Thomas and Walker streets, will have 14,100sq m of office space for five government departments - Human Services, Justice, Planning and Community Development and Education and Early Childhood Development.

The Victorian Government will contribute $19 million towards the project with the remaining costs shouldered by Grocon, which will own the building when it is completed.

Grocon was chosen after a competitive tender process. Construction is set to start early next year and is due to finish in the second half of 2011.

Grocon developments general manager Carolyn Viney said the Government's committment to Dandenong "gives us confidence that our building will be one of many to come".

So far, there are plans for a $50 million 16-level hotel and conference centre on Lonsdale St and a $30 million office and retail building for the Lonsdale and Foster streets corner.

Dandenong, the flagship project of the Victorian Government's Transit Cities program, has used the Docklands development as a model for urban renewal in other suburbs.

Through its VicUrban development arm, the Government has put $290 million into revamping the city's ageing infrastructure and acquiring properties owned by several owners to create a 7ha development site.

VicUrban paid $8 million for the Grand International Entertainment Centre in Thomas St where the Grocon building will be built.

It is not yet known whether Grocon will add the building to its growing managed funds business after it is finished.

Grocon is so keen to grow a portfolio of investment properties it has become embroiled in a fight with Brookfield Multiplex over the control of the $550 million Multiplex Prime Property Fund.

Grocon, in partnership with US hedge fund Oaktree Capital, has made a $150 million rescue bid for the listed Mulitplex fund, which urgently needs to pay down debt.

The Takeovers Panel yesterday ordered Brookfield Multiplex to stop its $50 million entitlement offer which gives Grocon-Oaktree more time to convince the fund's bankers they can help solve its problems.

The company has even offered to sell the new Fairfax Media building it is constructing on the corner of Spencer and Collins streets into the fund.