Super fund developer Cbus Property struck a purchase deal worth more than A$170 million for four neighboring Melbourne properties, the Australian Financial Review reported.
The assets include Chip Eng Seng Corp. Ltd.'s halted Tower Melbourne project at 150 Queen St., which was under a legal dispute since 2013. Cbus will buy the property for A$55 million.
Singapore-based Chip Eng said legal completion of the asset's disposal — between its Australian unit CES-Queen (Vic) Pty. Ltd. and an unrelated, unidentified company — will occur July 3, according to a release, adding that the deal provides it with a "clean exit" from the disputed development.
The company revealed that CES-Queen bought the commercial building site in September 2011 with plans to construct a A$350 million, 71-story tower, comprising 581 freehold residential units. The company's plans were challenged, however, by Singapore's Chow family, which owns the two neighboring properties included in the A$170 million deal with Cbus, the paper highlighted.
With plans to erect serviced apartments next door at 140 Queen St. and 21-27 McKillop St., the Chow family engaged in a legal battle following which CES-Queen's demolition works never took flight. The latter said it also began to revoke pre-sale contracts for units at the Tower Melbourne, a process that the publication noted involved the return of 10% deposits on hand for 556 contracts. According to a company release, the two contesting parties concurrently signed a deed of settlement and release.
Chip Eng aims to funnel net proceeds from the sale for use as additional working capital and to undertake new acquisition opportunities.
Colliers International brokered the sale of the three properties, according to the Australian Financial Review.
Aside from the three assets, Cbus secured the fourth adjoining property at 423 Bourke St. from a Brunei-based family. Collectively, the sites offer Cbus the opportunity to develop a mixed-use scheme worth upward of A$1 billion on 3,000 square meters, the March 16 report noted.
