Macquarie Group revives Sydney skyscraper sale

39 Martin Place, Sydney.
39 Martin Place, Sydney.

Investment bank Macquarie Group is again negotiating to sell an under-construction skyscraper in the heart of Sydney that it is developing above the new Martin Place metro station that it was close to selling for almost $1bn before the coronavirus crisis struck.

Talks have been rekindled on the under construction 39 Martin Place with it now in line to be purchased by a consortium, guided by local office funds manager Investa Property Group.

While the parties have declined to comment, the play also shows the critical role of offshore capital with Investa thought to have partnered with an international pension house.

An earlier round of negotiations with superannuation-backed property fund ISPT, that would have seen the complex trade for as commercial property values peaked, collapsed as the crisis hit, recalibrating values and the latest talks are closer to the $800 million mark.

A deal on the Martin Place tower could show the dramatic impact of the crisis on office developments that carry substantial leasing risk with the prime tower needing to find tenants to move in when it is finished in 2024.

Just this week Dexus sold a tower at 45 Clarence Street, Sydney, for $530 million, in line with its value last December via CBRE. That deal showed well leased buildings remain attractive and it was picked up by Peakstone, a Singapore headquartered manager of Asian capital.

The parties in the Macquarie talks refused to comment but if the transaction is concluded it would show a significant shift in the values of even prime office buildings if that carry leasing risk.

While tenants that are in offices are paying, particularly if they are major corporations bound by longer term leases, fresh leasing on new projects to big tenants has become much tougher, property agents said.

Macquarie was close to selling the tower in February to ISPT in a show of its property prowess. The building is part of a larger twin tower project above the planned Martin Place metro station.

The bank will own and occupy one new tower, in addition to its existing headquarters at 50 Martin Place, and pre-sell the other tower, known as 39 Martin Place.

The tower at No 39 will sit on the southern side of Martin Place, will stand 29 storeys above the southern entrance, and still attract the cream of the city’s tenants once the virus abates. Macquarie will go into the 39-storey tower, above the metro’s northern entrance.

This southern tower will span about 30,000sq m of premium office space with floor plates of 1100sq m in the tower and 1300sq m in the podium. Naming rights are also on offer.

Martin Place has undergone a renaissance with towers ranging from 60 Martin Place, developed by Investa and Gwynvill, the Dexus project at 5 Martin Place, and Charter Hall’s revamp of 1 Martin Place.

This article originally appeared on