An artist’s impression of One City Hill: climate of uncertainty around international students and general market reticence had affected the viability of the project. Photo: Supplied.
One of the city’s most significant mixed-use residential construction projects has been felled by the coronavirus crisis, with Morris Property Group forced to shelve its One City Hill development.
MPG says a perfect storm of market jitters and dwindling international student numbers whipped up by COVID-19 has prompted it to call a halt to the development on Section 100 next to the Law Courts, and refocus on a commercial possibility.
The Canberra property sector is seen as crucial to any recovery from the COVID-19 induced economic downturn.
The seasoned Canberra developer turned the first sod on the project last November after acquiring the site from Leighton Properties and Mirvac in June 2018 for $85 million.
But MPG Director Barry Morris said the climate of uncertainty around international students, particularly from China, and general market reticence had affected the viability of the project.
The Australian Bureau of Statistics recorded a 16 per cent drop in student arrivals in March compared with the previous year.
“We haven’t been able to achieve the necessary pre-sales for the project so we’ve decided not to proceed with the current design,” Mr Morris said.
“It’s obviously disappointing but the appeal of the location is how close it is to the ANU and the student market has been the worst hit by coronavirus. We hear that investors are waiting in the wings to return, but with the current situation there’s no certainty around when, or if, that will happen.”
Morris Property Group Director, Barry Morris: “Sometimes you have to make the hard decisions to get the right outcome.” Photo: File.
Bordered by Vernon Circle and London Circuit, the site was earmarked for 345 apartments and 600 square metres of shops and cafes in the City West precinct, and was an attractive proposition for international buyers wanting to be near one of the nation’s best universities when it was announced in late 2018.
Mr Morris said that as excavation works on the site were complete and construction on the One City Hill buildings had not begun, it made economic sense for Morris Property Group to focus its attention on its two other prestige Canberra properties – the inner-city Park Avenue now under construction on Allara Street and Renaissance, a new urban precinct in Manuka that has just won DA approval.
Mr Morris said the 120 purchasers who had paid deposits for One City Hill apartments would given the opportunity to transfer to Park Avenue or Renaissance and also be offered an incentive on their new purchase in either of the developments to compensate them for the inconvenience.
Construction on Park Avenue is due to be completed in April 2021 while Renaissance will welcome its first residents in late 2021. One City Hill, which was to be the first stage of 1000-apartment precinct, was slated for a 2022 completion date.
Mr Morris said Morris Property Group was currently exploring commercial opportunities for the 27,000 square metre site.
“We may come back in a couple of years with some sort of residential format on the site, but what we didn’t want to do was sit on people’s deposits and give them false hope,” he said.
“We do not want to disadvantage our customers in any way. We want to allow them to make an informed decision now on what they want to do.”
An extension of Edinburgh Avenue and Knowles Place will transform access in City West. Image: Supplied.
Mr Morris said works on the Edinburgh Avenue extension, which will provide greater connectivity to the city centre and was a condition of the sales deed, were continuing and due to be complete by August this year.
He remained confident Canberra would rebound more quickly from the impact of coronavirus than other Australian capital cities given its relatively low unemployment rates and high median wages, and that the property industry would be central to that recovery.
But he added that good judgment was critical to sustaining the multi-million-dollar industry.
“We’ve been building apartments for more than 40 years in the ACT. The fact is the time was not right for this particular development,” he said. “Sometimes you have to make the hard decisions to get the right outcome.”
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