Having obtained preferred tenderer status, a consortium led by Melbourne-based Tetris Capital, along with Japan-owned builder Icon Kajima looks well positioned to undertake Victoria’s second ground lease public housing renewal project.

Part of the state government’s overall $5.3 billion Big Build program (under public-private partnership), the Ground Lease Project 2 encompasses plans by Homes Victoria to deliver up to 1,400 new homes across four Melbourne existing public housing sites.

Suburbs earmarked for development (under project 2) include Prahran, Hampton East, Port Melbourne and South Yarra – the largest of the four sites – where demolition work has already started to replace the existing 204 walk-up homes with one, two, three and four-bedroom homes plus specialist disability accommodation.

In addition to a mix of affordable and market rental homes, the $850 million project will build at least 650 social housing homes – a minimum boost of 10% in social housing at each of the four sites.

While Tetris Capital’s principal Stephen McDonough was unable to provide any further updates, it’s understood that the company’s consortium partners include not-for-profit Community Housing Ltd (CHL).

The successful consortium will be announced in mid-to-late 2023 and main construction work is expected to commence early 2024, with completion expected by late 2026.

In addition to design, and construction, the successful consortium will be charged with financing and maintenance of the project.

It’s understood the consortium’s financial backing is coming from ANZ and Sumitomo Mitsui Banking Corporation plus the federal government’s National Housing Finance and Investment Corporation (NHFIC).

Ground Lease Project 2 will be consistent with the partnership model being used to build 1,110 social, affordable and market rental homes in Brighton, Prahran and Flemington (Ground Lease Model 1) on a 40-year contract under which the state retains ownership of the underlying land.

The not-for-profit Building Communities consortium responsible for Ground Lease Model 1 included: Community Housing Ltd, Tetris Capital, NHFIC, Icon Kajima, and Citta Property Group – which is not part of the current bid.

Image: Suburbs earmarked for development (under ground lease project 2) include Prahran, Hampton East, Port Melbourne and South Yarra: Unsplash