Chris Langford took a $220m gamble at the height of COVID. Now, it’s paying off

3 months ago 7

When former Hawthorn champion Chris Langford first visited 299 Bourke Street in July 2020 with his business partner Simon Morris, the path ahead for the then-rundown site was not straightforward.

“We bought this in COVID when the city was in lockdown,” Langford says. “We stood on the roof and looked across the city, and there was no one in Bourke Street Mall. It took a bit of conviction at that point to say, ‘Is Melbourne going to bounce back? Will Bourke Street ever be as good as it was?’”

Architect Simon Swaney and Chris Langford on the rooftop balcony of the Bourke Street building.

Though the site is now home to Rodd & Gunn’s store and restaurant, the offices of advertising giant Clemenger and Mecca’s flagship store, which opened to much fanfare earlier this year, Langford says the redevelopment was far from smooth sailing.

Initially, he and Morris expected the build to be finished in 2023, but they were quickly hit with delays. These included stumbling upon what Langford calls the “surprises” of the heritage-listed building, which began its life as the CJ Coles building in 1929, and challenges such as the shortage of labour and supplies in Melbourne’s construction market.

“You’ve got the Metro train projects under way, and they’re using escalator contractors, they’re building steel work, they’re doing tiling, they’re doing plastering, they’re doing electrical finishes in their concourses and their platforms,” he says.

“There was a huge press on for labour the last few years, and our builder and our subcontractors were all impacted by that, one way or another, as well as material lead times and delivery waiting times.”

Through Newmark Capital, Morris and Langford’s property funds management group, they bought the site for $121 million and began a redevelopment that Langford says cost “in the order of $100 million”.

The Australian Financial Review reported earlier this year that Newmark had been forced to raise at least another $40 million after costs and time blew out.

Having co-founded Newmark in 2011, Morris and Langford began by acquiring the $55 million Homemaker Centre in Chadstone and have been adding to their portfolio ever since. Now, they boast more than $1.6 billion in assets under management.

A move that surprised many, though, came last year when Newmark sold the Jam Factory in South Yarra a decade after buying the site for $165 million.

The prime real estate was sold to rich lister Tim Gurner and ASX- listed financier Qualitas for $200 million. Langford says the decision was reached after the pandemic, when it became clear that the market had changed and demand for residential developments in the area grew.

“There is a lot of misapprehension about our role in that. Yes, we owned it for a while,” he says. “I think it is incredible real estate. We are big believers in it. It is a two-hectare site in the middle of South Yarra – what’s not to love?”

Despite the setbacks, Langford says he was always confident that the redevelopment of 299 Bourke Street would succeed.

“We knew this was going to be a major lantern that will attract a lot of visitors, a lot of shoppers, and will really drive traffic in the mall in a very significant way,” he says.

Swaney and Langford outside Newmark Capital’s Bourke Street building, which houses Mecca, Rodd & Gunn and Omnicom.

As well as leasing 4000 square metres to Mecca for its store, Newmark added two levels that are set back and not visible from street level.

Architect Simon Swaney, of Bates Smart, says these additional floors make the building much more commercially viable.

“What’s happened here is adaptive reuse, finding a new purpose and adapting the building that still respects the heritage, but it enables it to have a new life,” he says.

Since its opening in August, Mecca’s flagship store has enjoyed a record number of customers, says Mecca founder Jo Horgan, with between 50,000 and 70,000 people coming through the store each week.

Rodd & Gunn’s Lodge Restaurant is an extension of the retail experience at the store.

Now, it is rumoured Langford has his sights set on more CBD real estate. There were reports last week that Newmark is in exclusive talks to buy the Midtown building on the corner of Bourke and Swanston streets.

Though Langford says he can’t comment on this, he is bullish on the future of retail in the CBD.

“If retail is under threat, it’s places that don’t have levels of engagement or service,” he says.

He points to the kind of experiential retail offered at 299 Bourke Street, including Mecca’s emphasis on service, allowing customers to sample thousands of products and have their hair and make-up done in-store, and Rodd & Gunn customers being able to eat at the brand’s restaurant or drink in its cellar bar.

“Melbourne as a city has shown it has a very strong nighttime economy,” he says. “It has a very strong event calendar that gets very strong visitation, and it is very different to other competing traditional retail environments.”

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