The developer behind Canberra's Campbell 5 precinct has bought the sites of the run-down Currong and Allawah flats in central Canberra for $47 million at auction.
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SHL Development secured the winning bid at a restricted auction on Wednesday.
The 25,630 square-metre site in Braddon is expected to house about 515 new apartments in buildings ranging from three to 12 storeys, as well as commercial space of about 4100 square metres.
SHL Development was among eight registered bidders and one of two key parties vying for the land, Section 52 Braddon, tussling with Amalgamated Builders before securing the winning bid.
Business development director Terry Shaw said the company was delighted to secure the central site, which is located opposite Canberra Centre, and said his company would "bring a new standard of living to the inner city".
"SHL intends to create a new hub for the Canberra city, with potential for over 500 apartments together with a mix of fantastic social and cultural spaces in an exciting new precinct," he said.
As part of the project, SHL Development will be responsible for demolishing the Allawah Court buildings. Housing tenants will be moved from the buildings in 2016 and 2017 before the site is razed.
Mr Shaw said connections between the site and the surrounding area would also change as part of the project.
Petrie Street will be extended across Cooyong Street and into the new site, connecting to Currong Street.
Meanwhile, the Scotts Crossing corridor will be strengthened via pedestrian pathways and parklands, softening the physical impact of Cooyong Street and improving connections from Civic to the Gorman House arts precinct.
The consortium attracted controversy late last year when it was revealed Chinese billionaire Liang Guangwei was linked to the purchase of the Campbell 5 site, which is next door to the new headquarters of Australia's domestic spy agency.
Mr Liang, the head of a state-backed technology conglomerate with high-level political connections, was a director of SHL Development until a month before the sale. He also shared a house with former director and main investor of the consortium, Jia Liang, who is no longer listed as a director of the company.
Colliers International ACT held the Section 52 Braddon auction at the Ainslie and Gorman Arts Centres on Wednesday afternoon.
Doma Group Canberra and Morris Property Group were among the other registered bidders vying for the site.
The Land Development Agency would not reveal the remaining companies, which were registered under special purpose entities.
Colliers ACT director Paul Powderly said the eight registered parties had to demonstrate they had $40 million in available credit as part of auction conditions issued by the agency.
To bid, companies also had to have completed a development of at least 200 units.
SHL Development had to pay 10 per cent of the cost of the site on Wednesday night. Settlement and payment of the remaining balance was expected to be finalised in early 2017.
Mr Powderly said the site's development would be transformative and would "change the whole city", likening it to the replacement of public housing with high-density development at the Kingston shops.
"That's why it's important the person who buys it is someone with experience and money so it actually gets delivered," he said.
"The Canberra CBD … needs more people. This City to the Lake project really drives that revitalisation. This is the first of those city-to-lake sites.
"For the Canberra Centre, for this whole strip, it changes the nature of the area."
The Currong and Allawah buildings were considered to be Canberra's first medium- and high-density public housing.
