Grollo exits Darling Harbour project

Chinese-backed Greaton has snapped up the development and construction rights to The Ribbon project from Grocon.

Daniel Grollo has sold Grocon’s rights to The Ribbon project to Greaton. Picture: Stuart McEvoy for The Australian.

Melbourne construction scion Daniel Grollo is pivoting the Grocon operation away from its construction roots with the company to exit Sydney’s landmark The Ribbon project in Darling Harbour.

In a low-profile play, Chinese-backed Greaton has snapped up the development and construction rights to The Ribbon project from Grocon, as the famed builder signals it will refocus on development, particularly the build-to-rent sector.

Greaton in 2016 struck an initial agreement to purchase the $730m hotel property billed by Marriott International as Sydney’s new W Hotel.

The sweeping 25-storey curvilinear building will house more than 400 rooms and 140 serviced apartments, as well as an IMAX theatre.

Grocon said that “having fully funded the project, Greaton has now secured earlier ownership of The Ribbon by reaching a strategic and commercial deal to purchase the rights from Grocon”.

The building is nearing completion and the W Hotel is slated to open next year, with Grocon to remain in place untilproject the handover.

The sale marks a shift for Grocon that is historically best known for building some of the country’s largest skyscrapers, including Melbourne’s Eureka Tower and Sydney’s Liberty Place complex.

Mr Grollo says the private developer is on more projects across Australia, with the company backed by Singapore’s GIC as it advances into the build-to-rent sector, with projects underway in Sydney and Melbourne.

The company has put a court dispute with landlord Dexus over a Brisbane tower behind it, and struck a deed of company arrangement ending the dispute, in which administrators made preliminary findings two inactive Grocon subsidiaries traded insolvent.

Mr Grollo denied that ahead of the rescue deal but insists the company will remain focused on creating on high-end investment-grade properties with the backing of top global players.

“We’re continuing to do what we do; we are still developing and creating great real estate assets,” he said.

The company is stepping up a longer term shift towards development. “We don’t want to be a fixed price contract builder,” he added. “For us its not the best use of capital and our skills.”

“Over the next five years Grocon will be in as many if not more projects,” he said. “You may not see as many Grocon cranes in the sky.”

Mr Grollo insists the shift is less about stepping away from building but about rather ensuring the company’s history of building excellence is best used on a scale at which it wants to operate.

“We’re still in the market place today working on future projects and we are we are very clear. Sydney is a very important part of the Australian economy. It could not be better except for Melbourne,” Mr Grollo said.