SunSuper sets sights on Locomotive Workshops building in Sydney

The move would be a shot in the arm for city office property as the $450m conversion by developer Mirvac had been set to come on the block.

Now it could be bought up by the super fund before it even hits the market in a play via real estate agencies Knight Frank and Colliers International.

The move is being made as SunSuper shifts its commercial property mandate to Mirvac but this is yet to be finalised. The parties have declined to comment while the shift is being undertaken.

AMP is under fire as it tries to lock up a fresh deal with US funds manager Ares that is chasing full control of the lucrative AMP Capital unit after the initial period for a joint venture on its private markets business expired.

AMP is also seeking to hold its $28bn real estate business together, arguing its capital arm’s extensive domestic real estate capabilities fit well with Ares’ global investment skills and the property arm could benefit from an injection of fresh capital.

But investors in its wholesale diversified property fund have revolted and are believed to be favouring a merger with a Dexus-run fund at a meeting to be held later this month.

If SunSuper picked up part of the Locomotive Workshop building it would add to its holdings in the Australian Technology Park, where it already has a one-third stake in the Commonwealth Bank complex.

The building in the South Eveleigh precinct is one of the state’s most significant heritage assets and is being refurbished internally, mainly into office space, and will be finished later this year. It will house tech firm Quantium and other tenants.

It comprises a two-storey sandstone and brick structure and has heritage features including cast iron columns, wrought iron trusses and heritage artefacts throughout the precinct. It will also include a retail and restaurant precinct like the Tramsheds project at Harold Park in Sydney’s inner west.

The rapid growth of rail transport during the second half of the 19th century led to the emergence of the Eveleigh Railway Workshops and they were used for locomotive manufacture and maintenance until they closed in 1989.

For a short period after the rail yard closed, Paddy’s Market occupied the site before the area was redeveloped into the Australian Technology Park.