Barangaroo timber office sells for $250m
The Hong Kong Monetary Authority and Lendlease’s Australian Prime Property Fund Commercial have teamed up to swoop on the listed developer’s timber office building at Sydney’s Barangaroo South precinct for about $250 million.
The deal marks one of the final commercial elements at the group’s Sydney Harbour precinct and also points to the involvement of its development, building, and funds units in the area.
Both the Asian group and the Lendlease-managed fund already hold a major exposure to the office towers and buying the boutique timber complex, to be occupied by WeWork, is a sign of their faith in both the new style of building and also the co-working space.
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In Brisbane, the company is developing the world’s largest and tallest engineered timber office building, 25 King, in the Brisbane Showgrounds, in what will be its fifth timber building in Australia.
WeWork is at the vanguard of a series of co-working companies that are expanding across the country, and last Wednesday it unveiled a deal to lease all six floors of office space across more than 10,000sq m at the 1 Sussex Street complex.
The building, sporting an outdoor terrace and ground floor retail, is one of the last commercial buildings in the precinct and both the leasing and pre-sale deals have been in the works for some years.
Hong Kong’s central banking institution, the HKMA, forged into the area in December 2015, taking a 25% stake in Tower One — the final skyscraper to be built in the precinct — for about $350 million.
Lendlease’s ability to develop and then fund new product has been on display as it builds out its South Barangaroo holdings.
It has already raised more than $3.5 billion of equity across the precinct. It has drawn investors including the Qatar Investment Authority, the Canada Pension Plan Investment Board and Dutch fund APG.
Local superannuation funds, as well as Lendlease’s managed wholesale office fund have also been active in the area.
APPF Commercial holds investments in all three office towers at the Barangaroo South precinct, as well as other nearby assets, including Darling Square, and has it also has a holding in the company’s Melbourne Quarter in the Docklands.
APPF Commercial has a one quarter stake in Tower One of International Towers Sydney. It also holds a 25 per cent interest in the trust that owns Towers Two and Three.
That trust owns Australia’s first engineered timber office, International House Sydney, which is occupied by global advisory firm Accenture.
WeWork, meanwhile, has quickly expanded in Australia and has five other locations in Sydney open or announced, most recently 64 York St and 383 George St.
The group has taken two sites in Melbourne and another in Brisbane, with space at Mirvac’s planned Suncorp headquarters building also under consideration.
The Lendlease building at Barangaroo South is known as Daramu House and will be built with cross-laminated timber and glue-laminated timber.
Lendlease has said there is global trend to flexible working and the building show cases its ability to draw capital into projects but the parties declined to comment on the transaction yesterday.
This article originally appeared on www.theaustralian.com.au/property.
