The iconic Jam Factory is set to be reborn as Melbourne’s best mixed-use precinct across retail, office, hotel, entertainment and luxury apartment living under a landmark new agreement between Newmark Capital, leading developer GURNERTM and real estate fund manager Qualitas.

Newmark has signed a deal with GURNERTM and Qualitas to jointly develop the Jam Factory into a vibrant mixed-use precinct that will reshape the face of South Yarra, with an expected end value in the order of $1.4 billion.

Tim Gurner said, “We understand the significance of this site and its potential to transform,” Gurner said. “At over 19,200sqm and worth over $1.4billion in revenue, it allows us to create something truly incredible that will offer locals, commercial tenants, travellers and owner occupiers access to a world no other site can offer.”

“I feel incredibly humbled and beyond excited to have this once-in-a-lifetime opportunity, working with the likes of Newmark Capital and Qualitas to transform this incredible site into what I know will become one of the best mixed-use precincts in the world.”

Once fully developed, the 19,250sqm site will include over 20,000sqm of retail, 20,000sqm of commercial office, a hospitality and entertainment precinct, a hotel and multiple ultra-luxury residential apartments.

The significant deal follows the announcement in late 2020 of a strategic partnership between GURNERTM and Australian real estate fund manager Qualitas, after the group confirmed $150million in equity from the Qualitas Real Estate Opportunity Fund 2, to undertake significant acquisitions.

The project aims to help reinvigorate the Chapel Street precinct and regain its rightful place at the epicentre of Melbourne’s retail and entertainment culture.

The site was purchased by Newmark Capital in 2015 and a permit obtained for a commercial retail and office precinct. Following changes in market conditions, Newmark has worked in collaboration with GURNERTM to develop a new, shared vision for the site, reflecting its significance to Melbourne.

The Jam Factory is Melbourne’s last remaining significant inner-suburban regeneration site, said GURNERTM CEO Tim Gurner, offering its developers the opportunity to make an important contribution to the city.

The deal and project have been described by Gurner as “the most important contribution to Melbourne any developer could make, given the history and importance of the Jam Factory to Melbournians, at a time when Chapel Street is desperate for change and re-birth’.

“We have the scale and location here to do something that is not possible on any other site in Melbourne,” Gurner said. “The destination will be highly sought-after by astute owner occupiers who understand the prestige and lifestyle afforded by the location.”

Newmark’s joint managing director, Chris Langford, said he was delighted to be working in partnership with Gurner, an industry leader in quality, high-end residential and hotel developments.

“This project will unlock the potential of an iconic site,” said Langford. “It will create Australia’s best mixed use development precinct, bringing to life a vision of a place to live, work, play and stay.”

“The new Jam Factory will become a signature, vibrant destination for Melbourne,” he said. “It will also create a significant number of construction jobs and full time employment opportunities with retail and commercial occupants.”

“Our desire is to restore the status of the Jam Factory and Chapel Street, with authenticity, creativity, and community at its core,” Langford said. “This site will be a district that encompasses the needs of the whole community."

The teams are in discussions with world-leading architects, with appointments imminent. The revised planning scheme is expected to be back in front of Council by mid-year, launched at the end of 2021 with construction slated to begin in early 2022 and completed by 2025.

“The project will reinvigorate the Chapel Street precinct, it will attract shoppers - and the apartments and hotel will draw even more people and investment to the area.”

“This is a right sized commercial and retail development that Newmark believes will be highly desirable to tenants and as an investment product – we have a strong belief in the area and the economy.” Said Chris Langsford. 

Mark Fischer, co-founder and global head of real estate Qualitas said, “ Our second Opportunity Fund has a thematic of securing pipeline for the next residential development cycle, targeting proven locations with great partners. The ability to deploy capital in to one of Melbourne’s most iconic locations alongside Gurner and Newmark is a rare opportunity.

“The scale and capital required for this transaction is of a size that very few other local players could undertake and the ability to use our discretionary funds platform to help bring the revitalisation of one of Melbourne’s great precincts to life is compelling. The real estate fundamentals of the location are indisputable and the deal provides the opportunity to bring together great real estate, nimble large- scale capital and market-leading development capabilities.”