THE Hunter Street Mall has a new owner.
Nine years after developer GPT first unveiled its ambitious plan to redevelop the inner city, a new buyer with a new vision has been found.
The Baird government will announce on Thursday that the 1.66 hectare mall site – stretching across two city blocks from the old David Jones building to the corner of Newcomen Street – has been sold to Sydney-based hotel owner and developer Iris Capital for an undisclosed figure.
Confirming the sale, Planning Minister Rob Stokes said it was “an exciting time in the history of Newcastle”.
“We are looking forward to seeing Iris Capital begin the next stage, creating new jobs as well as new residential, commercial and retail opportunities for the city,” he said.
The sale opens the way for a master plan-approved seven-stage development comprising about 500 residential apartments and 7600 square-metres of boutique retail and commercial space at ground level.
Iris Capital is headed up by Sam Arnaout – who reportedly shelled out $22 million for the penthouse of the iconic ‘Toaster’ building on Sydney Harbour last year.
The hotel baron owns an impressive portfolio of Sydney hotels, including the Clovelly Hotel and The Bourbon in Potts Point.
In February Iris Capital lodged plans for a 44-storey mixed-use tower atop the former PJ Gallagher’s pub in Parramatta reportedly worth $1 billion.
The company is also behind the Wyndham Ridge Estate – a 248 lot subdivision near Greta.
Mr Arnaout – who couldn’t be contacted on Wednesday but is expected to be in Newcastle on Thursday for the announcement of the deal – also owns the 48-hectare Sweetwater estate, and Hungerford Hill estates, both in the Hunter Valley.
While details of his vision for the Mall are yet to be released, the Newcastle Herald understands the long-term plan for the David Jones building includes upscale warehouse apartments and a boutique-style hotel on the upper floors, with a “Soho-type fine foods deli and restaurant” on the ground floor.
“Harris Farm on steroids,” a source with detailed knowledge of the sale process said.
While the government was tight-lipped about the sale price, a well-informed industry insider gave an estimate of about $40 million.
GPT reportedly paid $100 million for the original land parcel in 2007, but sold two-thirds to the state government developer Landcom – now Urbangrowth – for $20 million in 2012.
UrbanGrowth NSW program director Michael Cassel said the sale was “a major milestone for the co-owners”, and was “a great opportunity to pass the baton on for the site to really reach its potential”.
“After four years negotiating a master plan and working with the community and Newcastle City Council, we believe we have a purchaser who is just as passionate about the vision we have worked hard to deliver for the East End,” Mr Cassel said.
“The new owner has expressed a desire to redevelop the site as a boutique, village-style community that returns the area to a vibrant, inner-city destination, which is in line with what we really wanted to achieve for the East End.”
The sale marks the next chapter in a decade of uncertainty over the future of the Hunter Street Mall.
In 2006, the then Lord Mayor John Tate announced a $60 million plan to build what became known as the stairway to heaven – a huge staircase modeled on the Spanish Steps in Rome that would link the Mall to King Street and the Christ Church Cathedral.
The plan failed to eventuate, and in 2007 GPT Group – the owner of Charlestown Square – announced its ambitious – but ultimately doomed – plan to build two major department stores, a supermarket and a multi-screen cinema in the Mall.
In 2012 the state government – through its developer arm Landcom, now Urbangrowth – purchased two-thirds of the site for $20 million, in a partnership deal with GPT to help spur the development.
It eventually became clear neither wanted to develop the site itself, and after a drawn-out building heights saga that at one stage saw a proposal for three towers as high as 20 storeys in the city – since reduced to a maximum of 12 storeys – Urbangrowth and GPT announced plans to sell in August.
Newcastle Lord Mayor Nuatali Nelmes said she was “very pleased” with the sale, saying it was “something that hasn’t been able to be achieved in decades”.
She said the lower building heights – which she had pushed for after becoming mayor in 2014 – would mean an “extraordinarily better” outcome.
“I think that all Novocastrians will be thankful in the future for the bullet they dodged,” she said.
“What the city would have been with those towers, and what it would have done to historic East End, it would have had a devastating effect.”
The government said on Wednesday that Iris Capital had agreed to adhere to the building heights outlined in the already approved master plan as part of the final contract of sale.