Fund manager Quintessential Equity’s expansion into the commercial property market in Geelong is gathering pace with a deal to develop a $200 million civic precinct in the state’s second-biggest city.
The latest deal – which will bring Quintessential’s exposure in Geelong close to $500 million – is part of a broader white collar-led recovery for a local economy hit by the closure of major manufacturers including Ford and Alcoa in recent years.
As a spin-off benefit, the civic project will also help stimulate the next generation of manufacturing, with the larger of the precinct’s two buildings, the council’s new offices, to be constructed from cross-laminated timber manufactured locally.
“The story of losing manufacturing in Geelong was a pretty hard story for years but now it is all turning,” Quintessential’s executive chairman, Shane Quinn, told The Australian Financial Review.
The new civic centre planned for Geelong.
State and federal agencies, including the Transport Accident Commission and the National Disability Insurance Agency, have moved to Geelong in recent years. Worksafe’s tenancy kick-started a $145 million development by Quintessential.
The private sector is making moves too, most recently a commitment by health insurer GMHBA to anchor a $95 million Quintessential development.
“You’re seeing the next wave of prosperity through the governments’ commitment to Geelong now coming to fruition because the private sector must offer their staff the equivalent accommodation to attract and retain them,” Mr Quinn said.
The recovery in Geelong is gaining momentum, in Mr Quinn’s view, as more white collar work becomes available in higher standard offices. Younger, university-educated people are being wooed by the city’s “lifestyle” appeal of access and cheaper housing compared to Melbourne and Sydney.
“We want to be a part of it,” he said.
The civic precinct comprises a council-occupied building of around 10,000sq m and a second, slightly larger commercial building. Quintessential is the developer of both. The Geelong council will retain its new headquarters through a fund through-style deal. The second building will be developed, funded and owned by Quintessential.
The new council HQ will have 10,000 sq m of office space.
The upside for the council is a project delivered without an increase in rates. In fact, it is forecast to generate a return of around $1.2 million annually once efficiencies and rental returns are factored in, according to Geelong mayor Bruce Harwood.
“We’re also future-proofing the city’s workplace needs and requirements for the next 20 to 30 years,” he said.
The project is a boon for local player Cross Laminated Offsite Solutions (CLOS), creating more jobs at its manufacturing facility in nearby Avalon.
“The announcement is hugely exciting for CLOS, which is still very new, but clearly the industry is leaning on our commitment to advanced manufacturing,” said managing director John Fitzgibbon.
Timber for the building product will be sourced from local and global supply chains.
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