Bank of China eyes $80m Sydney CBD office sale
Chinese players are exiting Sydney’s office market. Picture: iStock
The Bank of China has tapped real estate agents for advice on the sale of its former building in the Sydney CBD, with the York St asset tipped to sell for more than $80m.
The bank’s offer comes as Chinese investors retreat from the CBD marked by developer Lendlease in July, snapping up the One Circular Quay site from investment house AWH for $850m.
The listed developer, backed by Mitsubishi Estate Asia, seized control of the property after years of uncertainty over its future in which it passed through the hands of Chinese property developers Yuhu and Dalian Wanda.
US group Blackstone last December snapped up a half stake in the $1.8bn Sydney landmark Grosvenor Place after months of negotiations prompted by Chinese sovereign fund CIC pulling back from a deal to buy the interest in the office skyscraper, amid political tensions between Australia and its largest trading partner.
In 2018, conglomerate HNA also offloaded its Sydney office block in York St in a deal worth more than $200m, also to US private equity giant Blackstone.
Others have since tried to exit. Shimao Group, controlled by Hui Wing Mao, is now planning a twin ultra-luxury tower project overlooking Sydney’s Hyde Park. But he had sought a partner on the project at 175 Liverpool St, though suitors were deterred by the $1bn price expectation for the entire block.
Private Chinese developer Han’s Holdings Group, which has proposed a dramatic 80-storey twin-tower scheme in the mid-town precinct of the Sydney CBD, last year also weighed an exit from its project that will have an end value of about $3bn.
The former Bank of China Building at 39-41 York St has been left vacant by the bank which in 2016 bought a tower at 140 Sussex St from Deutsche Asset Management for $130m for its new headquarters.
At the time, China’s top banks were on the march in Australia, with the Bank of China having the longest established footprint with a national network across Australia.
The bank, China’s fourth largest, had long-owned the office building in York St and had sought a larger tower for its Australia headquarters.
Now it could be picked up by an owner-occupier or repurposed by a developer, as many lower-grade sites are expected to be overhauled to win new tenants in the wake of the pandemic. Up to 4134sq m of office space was available from August, according to CityScope.
The bank could make a lucrative exit as it bought the building for $10.6m in 1992 via an informal tender.
The 13-storey complex was previously known as Erskine House and its floors have a typical area of 300sq m. It was completed in 1965 and refurbished in 1988, 1996 and again in late 1997.
Bank of China was formally established in 1912, and in 1994 the bank was transformed into a wholly state-owned commercial bank.
The bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange in 2006.
