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REPRINTS & PERMISSIONS
Developer buys last Pentridge Prison sites
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Aerial view of the Pentridge development site in Melbourne.
by Nick Lenaghan
Melbourne-based property developer Future Estate has snapped up the remaining undeveloped lots around Melbourne's former Pentridge Prison. The site around the well-known prison, which finally closed down in 1997, was the subject of discussions at the recent at the royal commission on unions. It was put on the market by its receivers, FTI Consulting. Included in the 3.7-hectare property are the former prison's D Division and its laundry, along with a small retail component and a partly developed commercial element. The site sold for about $27 million. In all, the transaction includes 12 sites ranging from 1670sqm to 5618sqm, as well as 10 retail properties and eight partly completed retail shells. It also incorporates 161 former prison cells. "The strong ongoing net migration to Victoria and Melbourne has created significant interest in residential and mixed-use development sites generally, particularly in the inner suburbs," said CBRE's Mark Granter, who handled the transaction, along with colleagues Justin Clarkson, Scott Orchard and Duncan McCulloch.
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On the buy side, Future Estate will add the Pentridge site to its $450 million pipeline of residential projects around Australia.
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"Pentridge Village represents an exciting opportunity for Future Estate to develop an iconic Melbourne landmark in the fast-growing suburb of Coburg," said its founder and managing director Ben Anderson.
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Future Estate also has projects at Bundoora in Melbourne and Mackay in North Queensland. Pentridge prison was built in Melbourne's inner north in the 1850s. It once housed notorious prisoners such as Mark "Chopper" Read.
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The Pentridge site returned to the headlines last year when allegations of union interference on a project were aired at the royal commission. Work on the development, controlled by the Chiavaroli family, had ground to a halt two years previously as costs rose and a union dispute festered.
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The debt backing the project was traded several times before July last year when it ended up with VPV Investments, which is linked to global hedge fund Varde. FTI Consulting were then appointed as receivers. "While acknowledging this is a site with a complex history and a number of issues to consider, there is the opportunity to reposition and rebrand the development in the market and capitalise on Melbourne's continued population growth," CBRE's Justin Clarkson said.
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