Barings eyes Darling Square office block as funds managers step up for recovering market
A Lendlease-managed fund and Aware Super are selling the eight-level Darling Square office block in Sydney.
Global asset manager Barings is targeting the purchase of the Darling Square office development in Sydney for about $360m as the market for larger office assets firms.
The move to secure the interest in the A-grade building comes as the gateway office market stages a recovery, with capital again looking to get set at an early part of the turnaround.
The Sydney market is partly following the lead of Brisbane, which has seen a number of deals struck by both syndicators and institutions, in an indicator that they are also able to raise funds more easily. Both Sentinel and Quintessential have picked up assets in Fortitude Valley, and North Sydney has also drawn fund managers.
A series of deals is being undertaken by syndicators, who are raising funds more rapidly than earlier in the cycle – partly as equity chases better returns than those on offer from term deposits.
The building was first put on the block last year by Lendlease’s flagship office fund and the heavyweight Aware Super, before being re-marketed via agents JLL and CBRE, who are handling the latest trade.
All parties have declined to comment on a prospective deal.
The 12-storey campus-style facility in the Darling Harbour precinct was developed by Lendlease, which was backed by the super fund.
Global asset manager Barings is targeting the purchase of the Darling Square office development in Sydney for about $360m.
The A-grade building, which spans a net lettable area of 27,749sq m over eight levels of offices and retail, is anchored by Commonwealth Bank. Completed in 2019, it was formerly the site of the Sydney Entertainment Centre car park, which was demolished as the area was revamped.
The building is occupied by blue-chip tenants, including CBA (71 per cent), Transgrid (13 per cent), First Parking (5 per cent) and Sparro Digital Marketing (4 per cent). It is a next-generation commercial building with leading ESG certifications, including Net Zero.
The offices sport cutting-edge workspaces with high quality fit-outs, wellness spaces, a luxury end-of-trip facility, and secure carparking. There is also an opportunity for it to be repositioned in future to accommodate an education tenancy given its proximity to major universities.
Lendlease is close to Aware Super, which is also a major shareholder in the developer, and it is believed to have been supportive in the broader battle for control of the APPF empire.
Barings has been active locally in recent years. In August 2022, it acquired Altis Property Partners, and rebranded the operation as Barings Real Estate Australia. It last year forked out $74m to buy a Perth large-format retail centre, Joondalup Square, which closed out its fourth Australia value-add strategy since the series began under the Altis banner in 2010.
The company flagged it would launch its fifth Australia value-add strategy this year when that deal was done. The firm, a subsidiary of MassMutual, seeks to deliver excess returns by leveraging its global scale and capabilities.
