Stockland swoops on Jetstar headquarters as apartment hopes take off

Jetstar staff will soon be looking for a new office in Victoria as the big name developer gets into back into apartments in the major capitals.

Jetstar’s headquarters at 79-81 Victoria Parade in Collingwood.

Property company Stockland is making a major push into the apartment market, with the developer purchasing the Melbourne home of budget airline Jetstar for close to $65m and flagging the launch of a Sydney project early next year.

The moves signal its belief in the capital city property markets turning around, despite their weak performance, and its desire to get back into unit projects, where returns can be higher than housing estates.

While Stockland has been selected to develop Sydney’s multibillion-dollar Waterloo Estate housing project, nudging out a rival consortium led by Lendlease earlier this year, it has not launched apartment projects since 2010, when it undertook The Hyde project in Sydney.

It has been scouting out Melbourne sites, including on St Kilda Road, but targeted the Collingwood building that was listed for sale by Henkell Brothers Investment Managers — headed by Australian-German philanthropist Hans Henkell, who has provided extensive support for Victoria’s opera industry.

An artist's impression of Stockland's project in Rosebery, Sydney.

The 79-81 Victoria Pde address is leased by the Qantas subsidiary, but Stockland could move rapidly on a project as the tenancies at the property expire in 2027. The existing three-storey building could make way for a 12-floor complex.

Colliers agents Jozef Dickinson, Matthew Stagg and Philip Heberling and CBRE’s Trent Hobart and Nathan Mufale handled the sale, but they declined to comment. The site also drew interest from rival housing developers and major build-to-rent operators, keen on the tightly-held part of Melbourne.

The property was billed as the last major corner site with more than 5000sq m of space in the inner-city suburb and sports views back to the CBD skyline and the MCG.

In the past few years, major developments along Victoria Parade have been undertaken by Mirvac and entrepreneur Tim Gurner. Build-to-rent players are also active, with Malaysia’s UEM Sunrise Berhad receiving planning approval last week for a $288m project in Collingwood.

A redevelopment scheme has been prepared for the Jetstar site by the renowned CHT Architects, but Stockland is likely to put its own touches on the project that overlooks the East Melbourne parklands.

Meanwhile, in Sydney, Stockland is planning to launch a boutique apartment development, at Stanton Place, Rosebery, in the city’s inner south.

Stockland has a long history in apartments, but was relatively quiet in the last boom as it focused on housing estates. It now sees the opportunities in units again.

Stockland executive general manager, apartments, Ben Christie, said the developer’s expertise and experience in creating connected communities meant it was well-placed.

“Urban renewal is about the evolution of our cities, and our apartments vision is to create the next generation of urban living, where design combined with curated community improves quality of life. Given people remain at the heart of our cities, we need to deliver vibrant and liveable urban communities that foster the connection between people and place,” Mr Christie said.

The company believes its mid-market projects will stack up despite interest rate pressures.

“We expect the apartment sector to be the beneficiary of tailwinds in replacement cost pressure, a compelling house to apartment price premium, and a material under-supply of apartments over the medium term, underpinning our intention to target pipeline growth in major urban centres,” Mr Christie said.

Stockland will launch the 144 unit Stanton Place project in Rosebery, in Sydney’s inner south, in early 2025.