Canadian giant makes play for Sydney’s Central Barangaroo

An artist’s impression of Central Barangaroo in Sydney. Picture: Supplied
An artist’s impression of Central Barangaroo in Sydney. Picture: Supplied

One of Canada’s largest property investors, Oxford Properties Group, has joined the race for the $1.4 billion office component of Grocon’s vast Central Barangaroo project on Sydney Harbour.

The group’s interest in the project will tighten the contest for the proposed office complex, which has already drawn interest from two local heavyweights and one of Japan’s largest real estate firms, Mitsui Fudosan Group.

Oxford has been seeking a major real estate project in Australia to complement its stake in the Port of Melbourne, that it picked up in 2016.

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The group is the global real estate arm of OMERS, the defined benefit pension plan for Ontario’s municipal employees, and has a track record of more than five decades as a property developer, owner, manager and investor.

It has backed precincts in major cities including New York City, where it is a driver of $US25 billion Hudson Yards development, as well as owning three Manhattan office buildings with Crown Acquisitions.

In total, Oxford oversees $US45 billion worth of real estate assets and has regional head offices in Toronto, New York, London, Luxembourg and, since this year, Singapore, from where the latest moves are being driven.

Property scion Daniel Grollo’s private Grocon empire is benefiting from the strong bidding on the office complex. Bids for the sale are due this week in a process run by Macquarie Capital and JLL.

Grocon has come under scrutiny over its finances, which have come under pressure. Attracting a deep field of bidders could help it refinance its operations, as it is also undertaking other projects in Sydney and Melbourne.

The interest from the offshore groups is being matched by local players, Investa Property Group and the listed Charter Hall. Any purchaser could reap development-style returns from backing the building of a 50,000sqm commercial tower.

Investa’s position might be strengthened if a stake in its management platform is bought by Macquarie, or it forms a tie-up with US private equity group Blackstone, which has its $3.1 billion Investa Office Fund under offer.

Charter Hall is also taking a bullish view on the Sydney office cycle and is in pole position to buy an $850 million-plus half stake in Westpac Place in the city’s Kent Street this month.

Mitsui Fudosan is one of Japan’s largest listed property companies with a $US70 billion empire spanning key international markets.

Grocon, which has carriage of the overall 5.2ha Central Barangaroo, has pitched the site as one of the last available large-scale opportunities in Sydney’s central business district.

It is working alongside local Westfield shopping centre owner Scentre Group, and Chinese-backed Aqualand. The latter group had been mentioned as a contender for the office site but appears more focused on restructuring its own Sydney-focused operations.

Winning a backer on the harbourside Sydney project would be a key moment for the Grocon business, after its losses on two Queensland projects

The company declined to comment.

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