Super-backed builder set to transform Arden over faster pitch

An industry super fund-backed consortium has been selected to develop the Arden urban renewal precinct despite a rival bid that would have completed the project 15 years sooner.The 13.5-hectare Arden Central site surrounding the new Metro Tunnel station in North Melbourne is poised to develop into about 5000 homes in a joint venture between Hostplus and the Hamton group, three building industry sources, speaking on the condition of anonymity to discuss the confidential bids, confirmed.The Arden Central site is a 13.5-hectare parcel of land in North Melbourne, about two kilometres north of the CBD.Joe ArmaoHowever, the choice of preferred development partner has been questioned after it defeated a rival bid, led by Lendlease, that promised to finish the project by 2037.During the shortlist process, the Hamton-Hostplus bid offered slightly more houses but had put forward a suggested completion date of 2052.Housing supply has emerged as one of Victoria’s biggest political challenges, with Arden repeatedly promoted by the state Labor government as a flagship urban renewal site capable of delivering thousands of homes close to the CBD.As part of the tender process, the government sought a minimum of 1000 dwellings for the first phase of Arden Central, accommodating about 2000 residents, by 2030. The overall target for the development was a minimum of 2400 homes.The Arden Precinct is a major urban renewal project north of the CBD.Development VictoriaBoth shortlisted bids comfortably exceeded that overall housing target and scheduled the first stages for completion in the early 2030s, documents presented to the government and seen by The Age show.But for the entire Arden Central project, the final two developers proposed about 5000 homes, with the Lendlease bid promising to deliver the full project 15 years faster.During the early stages of the tender the government also required bidders to set aside space for an entertainment venue, amid growing calls from sports and entertainment representatives for new arenas and entertainment venues close to Melbourne’s CBD.One industry source with knowledge of the tender process, who was not authorised to speak publicly, said it was difficult to understand why the state government would not prioritise the rapid delivery of housing.Arden Station is currently surrounded by empty paddocks.Jason South“It’s outrageous that in the middle of a housing and cost-of-living crisis, and with the state already in so much debt, that taxpayer dollars would be used to fund an event venue over urgently delivering housing.”Documents seen by The Age also reveal that developers were required to pay an $800,000 quarterly development licence fee until the completion once building was under way – up to $3.2 million a year – in addition to a rights’ payment which is the upfront amount that builders pay for the right to develop government-owned land.Two building sources with knowledge of government projects described the licence fee structure as unusual for a development of this type because it effectively charges the successful bidder for Development Victoria to oversee delivery of the project.One source, speaking on the condition of anonymity, said such an arrangement “discouraged the [government from the] rapid delivery of homes”.The Arden precinct is one of the largest concentrations of government-owned land within two kilometres of Melbourne’s CBD and has long been identified as a cornerstone of the city’s urban renewal agenda.The wider 44-hectare precinct is expected to accommodate about 20,000 residents and support up to 34,000 jobs by 2051, while the government has previously said that the Arden Central area would deliver more than 3500 homes.Development Victoria launched the market process for Arden Central in June 2024 seeking a private sector partner to transform the government-owned land around Arden into a mixed-used precinct featuring housing, jobs, schools and community facilities, with at least 10 per cent affordable housing.Initial tender documents, issued in 2025, reserved about two hectares of the site for a 3500-seat entertainment venue to accommodate a production, similar to the ABBA Voyage show.As efforts to bring the holographic ABBA concert to Melbourne stalled last year, bidders were advised that a dedicated entertainment precinct had been removed from the project and the land returned to residential use.But an industry source, speaking on the condition of anonymity to discuss the bids, said it was unsure whether the winning design would still include an entertainment precinct given the growing calls for more entertainment venues to serve Melbourne’s crowded entertainment calendar.In 2022, The Age revealed that US-based live music company Live Nation had developed a proposal for a new 3500-capacity live music space in Melbourne and was seeking government support.According to documents prepared for cabinet at the time, Live Nation initially approached the government with a plan to construct a new venue in Docklands that would host more than 100 shows a year.Voyage, the ABBA virtual show in the UK.Johan PerssonAt the time it costed the venue at about $20 million and was seeking a financial contribution of $5 million from the state government.That proposal was supported by Development Victoria, the government’s major projects arm which has been running the tender process for Arden Central.A spokesperson for the Hamton Property Group confirmed to The Age that the consortium was still taking part in the competitive tender process but said that details remained confidential.Lendlease was also contacted by The Age but declined to comment on the outcome.Opposition planning spokesman David Southwick questioned the government’s process, which was overseen by Development Victoria, and suggested the process had all the hallmarks of a “dodgy Labor deal” at the expense of Victorians.“Victorians deserve an immediate explanation as to why Labor has backed a bid that will deliver new homes 15 years later than the alternative,” he said.A spokesperson for the state government said the tender process remained “active and confidential”.“The Arden Precinct is a major urban renewal project that will deliver thousands of homes just two minutes by train from Parkville hospitals, universities and Melbourne CBD,” the spokesperson said.“Development Victoria is running a competitive tender process for Arden Central.”Start the day with a summary of the day’s most important and interesting stories, analysis and insights. 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