DFO owners to untie from South Wharf
The Age
Wednesday March 17, 2010
Cinemas and food outlets will complete the project, writes Philip Hopkins. THE final stage of the $750 million South Wharf project will not be completed until December, but the delay is not expected to hold up the sale of the Direct Factory Outlets complex.Two main elements remain unfinished €” a six or seven-screen cinema centre in the DFO basement with a separate entrance from the wharf, and the refurbished boat sheds along the wharf.Geoff Porz, chief executive of the developer, Austexx, told BusinessDay that the sheds, containing a food court and restaurants, were being put through the liquor licence application process."When they all open together in one hit, which we aim to do in December this year, the cinemas will open at the same time. They are part of that precinct," he said.Mr Porz said the final price for the DFO would include the extra cost of completing the cinema and the restaurants. "The price for the asset is a function of its income and value. The cost of building along the river . . . we factored that in when we did the development," he said. "There are engineering issues €” not so much the closeness to the river, but the shallow water table, but there has been so much development on Southbank and Docklands, Melbourne has good expertise in that area."The DFO complex is a mini-city. There are 104 tenants in the shopping area basement located under the open, 3000-lot car park; a homemaker centre on the ground and first levels; an office tower; the boat sheds food area; 29 strata two-storey townhouses, most of which overlook the river; and 10 strata office studios with river views.The 12-level, five Green Star office tower, leased by Bayley Stuart property consultants, has 20,736 square metres of floor space and 404 parking bays. Tenants are Kraft Foods, ANL shipping line, LeasePlan Australia and Baulderstone. The annual $9.09 million income, with yearly rent increases, offers stable cash flow until 2017.The site does not include the Hilton Hotel, which is part of the Melbourne Convention Centre project built by the Plenary Group. "However, from a design point of view €” for the customer €” it was meant to be seen as one precinct," Mr Porz said.Jones Lang LaSalle is marketing the DFO precinct, but CB Richard Ellis is marketing the office tower separately. "You could find a buyer for the tower, or the whole retail portfolio, " Mr Porz said. "If the tower goes with it, so be it, but if the tower is sold separately, it's not a problem."South Wharf is being sold as part of Austexx's whole DFO retail chain, believed to be worth at least $1.5 billion.
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