THE PROPERTY DEVELOPMENT REVIEW
“When we started, we were dealing with onshore, local high net-worth investors... assets that were generally up to that $75-$100 million mark.” “Across the board, we were investing in office, retail, residential, etc. We’ve sort of changed that now as the business has grown. We’ve started to tap into a lot of offshore capital.” In the competitive world of offshore capital, Michael stresses that opportunities arise based on “track record”. He maintains that AsheMorgan’s consistency has created a reputation that keeps overseas investors dialed into their projects, even as more and more groups jockey for the attention of this capital. “Once you start to build a track record and you’re bringing in capital and people can see that you’re performing, people want to get on the bandwagon.” THE DISTRICT, DOCKLANDS – REPOSITIONING 82,500 SQM IN NET LETTABLE AREA (NLA) “When we bought that, it was a bit of a white elephant... It’s taken us quite a while to reposition that asset.” The District in Melbourne’s Docklands is AsheMorgan’s long-haul redevelopment of a well-renown landholding, and is starting to generate some significant noise thanks to its rejuvenation of what was previously considered a misfiring. The group acquired the 10-hectare precinct from ING for $150 million in 2014, and since then, they have transformed what was a predominantly retail-centric commercial landholding into a diversified establishment that contains over 82,000 sqm in NLA. “It was sort of an unsuccessful Discount Factory Outlet; we’ve pivoted towards mixed-use. We’ve built an entertainment precinct. We’ve built a fresh food precinct. We’re pivoting the upstairs [areas] towards more commercial. It’s a real mixed-use asset.” For an area that had fallen into infamy, it has taken an incredibly
The District, Docklands - AsheMorgan’s 10-hectare redevelopment of a once-forgotten precinct
ambitious, concerted effort to transform The District into what it is today. WHERE THE PROPERTY SECTOR IS HEADED Many are bracing for turbulence, and it’s not surprising; the RBA’s hiking of the cash rate has led to an uncertain economic landscape. But Michael believes that some people’s expectations should be slightly more temperate. “My view is that things are not going to be as bad as what people expect.” That said, Rothner admits that a disruption is inevitable, but that it will be less severe than some experts are anticipating. “I mean, you’ve seen interest rates come up 2 per cent in the last six months – that hasn’t really filtered through yet. Surely that’s going to have an effect on cap rates... but I do think there will be opportunities. But I don’t think that there’s going to be any bloodbath coming in the next 6-to-12 months.”
AsheMorgan’s estimate of The District’s NLA to 2027
October / November 2022 – 13
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