Mirvac seeks Japanese backers for $2bn Darling Harbour gem

Property developer Mirvac plans to add another Japanese company to its roster of backers on high-profile redevelopment of a prime Sydney harbour site.

An artist’s impression of Mirvac’s Harbourside Residences on Sydney’s Darling Harbour.

Property developer Mirvac plans to add another Japanese company to its roster of backers on high-profile property projects.

The listed company is in talks to secure a partner on the redevelopment of the Harbourside Shopping Centre, and a group from Japan heads the field.

The local company has won interest from Daiwa House, which has already established a presence in Australia and is backing a build-to-rent project at Melbourne Quarter that Lendlease is undertaking.

The Japanese group, alongside another heavyweight, Sumitomo Forestry, had also supported an apartment project by EG Funds Management in Sydney’s inner west and bought into local home builders.

Mirvac has already set up ties with other Japanese players, who also have shown interest in the project and could emerge with a slice in it as they often club together or introduce deals to fellow Japanese players.

Other Japanese players that Mirvac already links include ties with include Sumitomo, Mitsui Fudosan and Daiburu, which stepped up to back a Melbourne office project in 2023.

At that time, at a ceremony to mark the start of work on the Darling Harbour project, Mirvac chief executive Campbell Hanan indicated that the group would take on a capital partner for the site that he dubbed the final development piece of the area.

Works have since advanced, and apartment sales have been ahead of expectations. The redevelopment includes a 48-level tower on the fringe of the Sydney CBD, where there are few comparable projects.

The Harbourside Residences will include 263 apartments with water and city skyline views. Sales have topped $700m. Cashed-up buyers have spent $24.5m, $20m and a further $20m securing off-the-plan four-bedroom subpenthouses on level 46 of the yet-to-be-built tower.

Japanese companies have emerged as the largest partners on new Australian commercial projects, partly as developers seek support to get their schemes out of the ground amid rising costs.

Listed companies have been unable to raise equity while their stocks are at a discount, and forming partnerships also gives them fees, boosting potential returns.

Japanese companies also have an appetite for mixed-use projects, which span residential apartments, retail and offices, all of which feature in the redevelopment of the former shopping centre in Darling Harbor.

In Sydney CBD, at the 55 Pitt Street project, Mirvac won the backing of Japanese heavyweight Mitsui Fudosan to build a $2bn tower at Circular Quay. Mirvac in June last year said it had pre-sold a 66 per cent interest in the project to the Japanese company. It has an estimated end value of about $2bn and will be delivered as a joint venture, with the co-owners retaining leasing risk.

In December, Mirvac and Japanese listed investment company Sumitomo said they had entered into a 50 per cent joint venture to develop homes and apartments at Highforest, in Sydney.

Highforest Mirvac was Sumitomo’s first property investment in Australia and marked the start of a long-term partnership with the Australian company.

The $830m project in the northwest Sydney suburb of West Pennant Hills is under construction and will comprise 165 detached and attached houses and 249 apartments.

Originally published as Mirvac seeks Japanese backers for $2bn Darling Harbour gem