Towers chase tenants as Circular Quay takes off

AMP Capital’s proposed Quay Quarter Sydney precinct at Circular Quay

Sydney’s Circular Quay is bracing for a wave of new office developments, with fund manager AMP Capital locking in accountants Deloitte for a major precommitment in its new $3 billion tower and rival Lendlease drawing interest from the Commonwealth Bank’s wealth arm for its project.

The pair have been battling for top-end tenants to get their projects under way, with more by Mirvac and Chinese construction groups also being prepared.

AMP Capital has the early jump, with Deloitte to shift out of nearby Grosvenor Place into its Quay Quarter Tower that will also house AMP, taking its occupancy to about 76%.

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The Australian revealed in November that Deloitte was positioned to anchor the complex, which will be complete in 2022.

Deloitte will take a 10-year lease over about 32,000sqm in the planned Circular Quay landmark. AMP in December 2016 took 35,000sqm.

The tower, being developed at Sydney’s 50 Bridge St, is owned by the AMP Capital Diversified Property Fund, AMP Capital Wholesale Office Fund and super fund Rest, which will hold a one-third interest upon completion for about $900 million.

AMP Capital global head of real estate Carmel Hourigan says the group is focused on creating a “globally significant precinct” that will transform the workplace through cutting-edge design and technology.

Taking an active management approach is the key to delivering sustainable income growth at this stage of the property cycle, she says.

The 200m tall, 50-storey tower designed by Danish architects 3XN comprises five stacked shifting glass volumes.

CBRE’s Mark Lacey and John Hickey and Colliers International’s Cameron Williams brokered the deal, which is split between high-rise and low-rise floors.

Rival Lendlease has won substantial interest for its $1.5 billion Circular Quay Tower, with a 20,000sqm requirement from Commonwealth Bank rumoured to be in the mix, alongside other prospective tenants.

Meanwhile, the Colonial First State Global Asset Management business is considering shifting to Barangaroo South to take up a smaller tenancy, with space tight in that harbourside precinct.

Japan’s largest bank, Mitsubishi UFJ Financial Group, in October last year bought Commonwealth Bank’s global asset management arm in a $4.1 billion deal that is still being finalised.

The bank, the developer and agents JLL and Cushman declined to comment yesterday.

This article originally appeared on www.theaustralian.com.au/property.