Iris Group picks up East End for $39 million

Iris Group has paid $39m for a Newcastle site that carries approval for a major mixed-use project.

Iris Capital chief executive Sam Arnaout. Picture: Chris Pavlich

Prominent Sydney hotel owner and developer Iris Group has paid $39 million for a Newcastle site that carries approval for a major mixed-use project.

The deal will see the expanding Iris Group pick up the site, which can accommodate a 55,000sq m residential, retail and office development, from the listed GPT Group and the state-owned UrbanGrowth NSW.

The property, known as the East End Portfolio, covers four city blocks and 1.66ha of premium land, and had been owned by the pair for some years.

The property recently won development approval from the NSW Joint Regional Planning Panel for 47,800sq m of residential space, 4900sq m of retail, and 2700sq m of office space.

Iris Capital chief executive Sam Arnaout said the project was “world class” and had the potential to rival international destinations, with about 500 luxury apartments to be developed.

“This site has the characteristics of some of the most beautiful destinations in the world,” Mr Arnaout said. “The grand heritage buildings and the history of the area lends itself to a gentrified development of an urban, seaside village.”

Mr Arnaout said the NSW government’s $500m commitment to revitalise the Newcastle City Centre was another consideration for the group.

He said his company had previously focused on Sydney-based projects and the move into the Newcastle market was prompted by his enthusiasm for the East End site and his move to the region. His family alternate between homes in Sydney and the Hunter Valley, where he has other interests.

Savills director, residential site sales, Stuart Cox, who managed the marketing campaign with Neil Cooke and Ben Azar, said the development would be a significant addition for New­castle, creating a vertical village the like of which the city had never seen before.

Mr Cooke said Newcastle had undergone an economic turnaround, including a significant rise in the construction of inner city apartment dwellings with ­little supply available for owner-occupiers and investors.