Lendlease, Scape Secure Final Approval for $1.2B Melbourne Redevelopment Project

ASX-listed construction giant Lendlease and Australia’s largest owner-operator of student housing, Scape, have received final approval for their A$1.7 billion ($1.2 billion) transformation of Queen Victoria Market in central Melbourne.

The mixed-use project, featuring 1,100 beds for university students and 560 build-to-rent apartments — including about 80 affordable homes — got the green light Tuesday from Sonya Kilkenny, the minister for planning in Victoria, after securing preliminary approval from the state government in March.

Known as Gurrowa Place, the development spans 3.2 hectares (7.9 acres) bordered by Franklin, Queen and Peel streets and is billed as the largest urban renewal project undertaken in Melbourne. Plans also call for a 1.8 hectare public park and a 28-storey commercial tower.

“Gurrowa Place will be a landmark development for our city — creating a new precinct that will enrich the iconic Queen Victoria Market, bring high-quality and affordable housing into this growing neighbourhood, and help the City of Melbourne meet its housing targets,” Melbourne Lord Mayor Nick Reece said Tuesday in a release.

Revitalised Precinct

The project will break ground in the coming months with completion expected in 2028 — 150 years after the opening of Queen Victoria Market, the Southern Hemisphere’s largest open-air marketplace.

With work proceeding under stringent heritage controls to preserve the precinct’s character, Lendlease will serve as developer and construction partner for the commercial and build-to-rent towers and Scape will act as developer of the student housing. The public park, called Market Square, will be designed by the city in collaboration with Lendlease.

“This development is not only about creating a vibrant student community but also contributing to the revitalisation of this historic market,” Scape Australia said Tuesday in a LinkedIn post.

Scape’s section of Gurrowa Place is the seed project of a A$1 billion student housing joint venture launched this year by the Sydney-based group, the Netherlands’ APG Asset Management and Canadian pension fund manager Ivanhoe Cambridge.

APG had backed Scape’s earlier development JVs, which were established in 2015 and 2018, with Ivanhoe Cambridge having committed $649 million to the company’s core strategy in 2022.

Canadian Neighbours

Some 300 metres (328 yards) to the east of Queen Victoria Market, Canada’s Brookfield Asset Management is taking on its third student housing project in Australia as international student enrolment in the country surges past pre-pandemic peaks.

Brookfield in March submitted a development application to build a 39-storey complex at 100 to 106 Franklin Street, with the project set to add 1,038 beds to Melbourne’s student housing supply.

The proposed project is less than 1 kilometre (0.6 miles) from the University of Melbourne, where Brookfield is developing its first purpose-built student accommodation, a 400-unit accommodation directly opposite the university’s main campus.

The investment giant is also developing a 31-storey tower at 240 Margaret Street in Brisbane’s central business district that could deliver 930 beds upon completion in 2026, according to local news reports.

Brookfield, which has a $6 billion portfolio of student accommodation globally, is taking on the trio of Aussie projects through a joint venture with Melbourne-based developer Citiplan Property, which will operate the assets under its Journal Student Living brand.

International student enrolments in the year-to-date to May totalled 810,960, up 17 percent compared with the same period in 2019, government data showed.