Tim Gurner teams with Qualitas to take control of Jam Factory luxury revamp with $30m penthouses to come

The developer is banking on turning the iconic Melbourne complex into New York-style apartments, luxury hotels, cinemas and high-end shopping.

Property developer Tim Gurner and listed real estate company Qualitas have taken full control of Melbourne’s iconic Jam Factory site and are planning a super luxury precinct worth almost $3bn which will include the city’s most expensive penthouses, priced at more than $30m.

The pair have poured $180m into buying the site and taking out original developer Newmark Capital, where former AFL star Chris Langford is joint managing director, and have a new scheme which reflects Gurner’s obsession with luxury and wellness.

Tim Gurner and Qualitas have acquired the remaining interest of Jam Factory from Newmark Capital and will develop a $2.75bn project.

While apartments will start from $750,000, they will range up to more than $30m for the penthouses, which would smash records in the city and top prices for landmark city towers.

The developer’s personal touches include a 10 metre-high library and lounge area, a large outdoor pool with formal gardens and tea house, a cigar lounge, afternoon tea drawing rooms and a large art collection along with Gurner’s much-vaunted wellness facilities.

The aggressive move reflects a dramatic surge at the top end of the apartment market, which is booming in Sydney with projects at Circular Quay and Barangaroo and record-breaking sales across the city’s harbourside suburbs.

Big developers are now turning their attention to Melbourne, where top end projects still stack up despite the lack of confidence in the state’s economy and commercial property market due to high land taxes.

The move will kickstart a much larger project than the trio had expected in 2021 when they unveiled plans to turn the stalled site into a $1.5bn mixed-use precinct sporting high-end shopping, top office and luxury residential towers and an ultra-luxury hotel.

Newmark bought the site in 2015 and brought in Gurner and Qualitas to add their flair to the project but missed planned 2022 kick off.

Mr Gurner said the revamped project was “building on the vision we created with Newmark”.

“I truly believe this to be Melbourne’s most important and iconic regeneration site,” he said.

“We are very excited to be able to deliver this incredible project with our long term strategic partner in Qualitas and we know together we can revitalise this critical site for Melbourne,” he said.

The latest project will make a repositioned Village cinema complex a larger part of the precinct.

“I truly believe this to be Melbourne’s most important and iconic regeneration site,” Mr Gurner said.

“We have been working very closely with Village to redesign a brand new, world-class cinema offering which will anchor the retail and provide an opportunity in the piazza for all of the best events, cinema openings and awards nights. I can very clearly see the red carpet arrival from our hotel port cochere down into the piazza and into the incredible cinema and entertaining space,” Mr Gurner said.

Village chief executive Clark Kirby and executive chairman Robert Kirby added Village Roadshow, now controlled by private equity firm BGH Capital, was “excited beyond imagination” to partner with Gurner to recreate what it called “the best cinemas in the world” in the Jam Factory development.

“The new Village Cinemas will now be on the ground floor and integrate beautifully into the Gurner vision of a central piazza, exciting eclectic retail and five-star hotel.

“The intricate design flexibility of these cinemas — which will include a new super luxury gold class offering — will be the first choice for premium functions, events and especially Hollywood and Australian film premieres,” he said.

The property play means the entrepreneurial developer and real estate manager will now become sole owners of the iconic 20,000 sqm site in South Yarra, where they will deliver what they dubbed a $2.75bn “city-defining project”.

Qualitas will use existing fund capital and further money raised from private and offshore institutional investors.

The project will include New York-style apartments.

The pair have ben working with Newmark for years on ways to unlock the site’s potential and structure a deal reflecting the dramatic changes which swept through the property market in the wake of the pandemic.

They now plan to develop a mixed-use precinct with about 15,000 sqm of offices, more than 20,000 sqm of retail, the Village Cinemas complex, a signature Gurner wellness precinct, two hotels and ultra luxury residential towers.

In a nod to the tough environment for big developments, they will cut the project into smaller stages to get the overall precinct underway with individual parts built independently, partly to beat the squeeze on builders reluctant to take on mega-projects amid soaring construction costs.

Gurner’s revised scheme will see more of the heritage facade kept and will include a repositioning of the cinemas to anchor it on a public piazza, which will focus on the original Jam Factory chimney, and sport cafes, bars and restaurants.

There will be two hotels and three luxury residential towers facing north towards the CBD skyline and northwest towards the bay, and the developer is promising a design which reflects the grandeur of New York’s finest upper east side buildings and residences.