Circular Quay skyscraper on cards after $190m site sale
Property group Dexus has secured a site for Sydney’s next super tower just one block back from Circular Quay by picking up a building from Canada’s Brookfield for a reported $190 million.
The deal effectively gives the Darren Steinberg-led company control over the entire block and will allow it to build a multi-billion-dollar tower to rival even the largest skyscrapers in the city.
Under city planning rules the tower could rise 300m with up to 120,000sqm of space once its low-rise and retail elements taken into account.
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If Dexus and its partner on at least one tower on the block — the Canada Pension Plan Investment Board — win approvals and tenant pre-commitments, the project would rise above rival projects on Circular Quay.
AMP Capital is developing the 200m, 50-storey Quay Quarter Tower, designed by Danish architects 3XN, and Lendlease is developing its own Circular Quay Tower, for which it has called in Foster + Partners.
Dexus would hold a design competition, with world class firms to vie for the right to design its tower, and could also tap investment partners as AMP Capital did by bringing superannuation fund REST into its $3 billion skyscraper.
Dexus and Brookfield declined to comment but the confidence with which the listed Australian group is moving reflects its belief that Sydney will remain the country’s gateway city over the next decade, drawing major financial services, technology and corporate tenants to what it sees as the last remaining “super-site” in Sydney’s CBD.
Dexus was quietly assembling the site for a new skyscraper but its plans received a huge boost after it picked up the property at 3 Spring St from Canadian giant Brookfield.
The group had been a potential rival but now Dexus has effective control over the key city block, as it also owns 56 Pitt Street with CPPIB.
Dexus had previously downplayed suggestions about a tie-up with Brookfield and has also successfully gained control of another Pitt Street strata building.
Dexus is active elsewhere in Sydney. In March it took full control of the $1.6 billion MLC Centre by teaming with its wholesale fund to buy out co-owner GPT and it has since pledged to kick off the $170 million revamp. It is also plans to reopen the Theatre Royal.
The latest under-the-radar purchase will propel its plans to actively develop new high-grade properties rather than buying completed towers on market at a time when commercial property prices are running at record highs.
The play also indicates Dexus is keen to be ready for the next wave of major developments in Sydney once new CBD buildings by rivals including Investa, Brookfield, AMP, Lendlease, Macquarie and Mirvac are completed.
Dexus has already proposed a complex with Singapore-backed group Frasers near Central Station as part of the high-tech precinct promoted by the NSW government. The Sydney plans complement moves by Dexus in Melbourne, where it secured the new $1.5bn 80 Collins Street development, and another nearby skyscraper site, as it capitalises on the growth of the Victorian capital.
In Brisbane it is planning a major overhaul of the Eagle Street Pier precinct, and consolidating the Sydney site will add to its long-term NSW development pipeline, which also includes a North Sydney site.
Two years ago, Brookfield had appeared set on its own plans on the block when it bought the 18-storey building in Spring St from long-time owner the Christie Group for $70 million. Brookfield had quietly optioned-up the site in 2016.
This article originally appeared on www.theaustralian.com.au/property.
