Lendlease puts stake in $1bn Victoria Cross tower on the block

The Lendlease Victoria Cross development in North Sydney.

Lendlease is looking to capitalise on the rerating of North Sydney’s office market by bringing a 75 per cent stake in the $1bn Victoria Cross over-station development back to market.

The company is betting that its recent success in winning over tenants, and encouraging signs that it will pick up more technology companies and groups shifting from Sydney’s north shore, will help it land a buyer.

The over-station office building and retail complex will be the first premium complex to market in the area and tenants are capitalising on the new metro station opening up.

Lendlease said last month that global pharmaceuticals company Novartis would shift to its Victoria Cross Tower in North Sydney, leasing about 1,700sq m of hi-tech office space in the mid-rise of the building.

It joins other businesses in the building, including the NBN, Ventia and 24/7 gym and wellness facility One Playground, as the tower gains leasing momentum. It is now more than 30 per cent leased, with a total of about 70 per cent leased or under offer ahead of practical completion later this year.

Lendlease has approached real estate agencies for advice on a potential sale but the company declined to comment.

Lendlease’s stake in Victoria Cross Tower is expected to be chased by global institutions.

The stake in the office building is being offered as the dynamics of the market have also shifted in the area, with developers capitalising on the NSW government’s fast-track planning scheme to convert a series of office blocks and projects into residential uses.

Apartment and build-to-rent schemes are being driven by developers ranging from Stockland, Aqualand, Freecity and even financial services giant Zurich. The shift is expected to drive a turnaround from the current high vacancy rate that has hit North Sydney offices and prompted a drop in the value of the project that was at one time mooted to be worth about $1.5bn.

Lendlease has long sought an external partner on the project and held talks with Japan’s Mitsubishi Estates Asia in 2023 about it taking an interest of at least 25 per cent.

Lendlease also sold a 25 per cent portion of the project to its own unlisted APPF Commercial fund in 2019.

The offer of the 75 per cent stake comes as global capital tries to get set in Sydney at a time when few landlords are selling in the CBD. North Sydney has instead become a point of focus with other groups also offering assets. British funds manager M&G is selling a 25 per cent interest in the landmark Coca-Cola Place in Mount Street in North Sydney via CBRE.

An incoming buyer would sit alongside Investa’s wholesale office fund, which owns a 75 per cent interest. Part of the pitch for that tower is that the completion of the fast-filling Victoria Cross Tower project will materially reduce diminishing vacancy rates.

Dexus and its flagship wholesale fund are also going to re-offer the skyscraper at 100 Mount Street in North Sydney that came close to selling to US investment manager Hines for more than $600m last year. The anchor tenant of the Dexus building, NBN, confirmed in January it was departing for the Lendlease development. It will occupy six floors or about 9000 sq m across levels six to 11 when it relocates in mid-2026.

Elsewhere in North Sydney, Hong Kong tycoon Francis Choi has put the Northpoint Tower skyscraper on the block for about $400m.