The GPT Group will "enhance" Sydney's Theatre Royal and introduce an international operator, as part of the $75 million redevelopment of the podium and plaza of the MLC Centre. Analysts and investors were introduced to the proposals at the start of a two-day familiarisation with GPT's Sydney and Melbourne office and logistics assets, beginning with a walking tour of the Sydney CBD.
The MLC tower, which is jointly owner with QIC, has been a focus for GPT since it became clear how much money would be required to repair the facade and how much space would become vacant, as key tenants such a Freehills moved out. One analsy famously described the building as a "money pit".
GPT confirmed that its share of facade remediation would be $65 million with the costs factored into its valuation - $383.2 on a cap rate of 6.75% according to the directors - and the work due for completion in 2017. A further $26 million is required for floor upgrades. As was reported at the results, 23,000m² was leased in the tower in 2014, boosting the occupancy to 85% with 9,800m² still to lease. in the short term GPT and QIC are refurbishing the food court, injecting 14 new operators, adding a basement supermarket and what GPT claims is the largest end-of-trip facility in Sydney with 196 bike racks, 318 lockers and 26 showers. Then GPT and QIC plan a major rework of the podium and plaza with new retail on Castlereagh Street, new food and retail offerings over the plaza and a more active foyer. They expect a 10% development margin.
Source: Australian Financial Review - Wednesday 25th March 2015