US group leads race to build $330m North Sydney office

An artist’s impression of the proposed THIRDi project in North Sydney.
An artist’s impression of the proposed THIRDi project in North Sydney.

US group Hines is looking to stamp its authority on the local office development market and is in pole position to build a new tower in North Sydney that could be worth about $330 million.

The company is heading the contest for a key site, which also drew interest from the development arm of local player Primewest, that will add to the wave of towers underway in the area.

Hines, one of the world’s largest private property funds groups, shifted into the local development scene this year, buying a corner site in Collingwood where it will build a timber tower.

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Hines picked up that site for $28.5 million and will build a “T3” commercial tower using timber, transit and technology. Its plans for North Sydney are even grander.

There has been a surge of interest in the area on the back of the new metro station and rising demand for space, with tenants including Nine and the NBN anchoring towers for Winten and Dexus. Others are also buying in the hot precinct.

The listed Abacus Property Group last month quickly found a use for funds it had set aside for its now thwarted takeover play for the Australian Unity Office Fund.

The company snapped up 99 Walker Street, North Sydney, that was sold by the Oxford Investa Property Partnership for $311.3 million.

Asian groups have also invested, with a deal by CBRE Global Investors to buy the Zurich headquarters for about $350m also sealed last month.

The site in North Sydney that Hines is targeting was brought to market by the private THIRDi Group, and was once n earmarked for a residential scheme, before the pre-sale market tanked.

CBRE’s Scott Gray-Spencer and Ben Wicks and JLL’s Paul Noonan, Rob Sewell and Mitch Noonan are handling the sale of the 2326sqm site, which has already drawn several offers of joint ventures or end take-out partners. The parties declined to comment. The property has a consolidation of 40 residential apartments across five buildings at 2-4 Blue Street and 1-5 William Street, just a few hundred metres from North Sydney’s rail interchange.

THIRDi Group was able to consolidate the site into a premium mixed-use development site via PropertyFox’s Tim Fox and Michael Wydeman.

It cited the property’s outstanding views of Sydney Harbour, the CBD and Barangaroo as drawcards. It is working with architects Woods Bagot and will put in a development application shortly.

THIRDi may consider a joint venture to deliver the project or a potential end sale.

A new office building could be delivered by 2021 to coincide with a forecast spike in tenant demand.

JLL recorded 32,500sqm of positive net absorption in North Sydney during first half 2019.

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