GPT mulls Circular Quay tower play

China’s Poly Global has lured strong interest in the $500m tower it is building at Circular Quay, with GPT looking to buy in.

An artist’s impression of Poly Global’s tower in George Street, Sydney

Chinese property developer Poly Global has snared strong interest in the $500m tower it is building at Sydney’s Circular Quay, with local listed company GPT eyeing off a play to buy into the development.

While a deal is yet to be finalised, the listed group has been looking at the opportunity as it seeks to reinvest in the heart of the Sydney CBD after selling a half stake in the MLC Centre to Dexus for $800m in March.

Although it signed a long-term lease extension in that landmark tower, it could also weigh up a shift to the Poly Centre in future if the boutique building meets its requirements.

The Bob Johnston-led GPT is cashed up after launching an $850m equity raising in June. It has already poured some of the proceeds into boosting its exposure to Sydney’s Darling Park complex.

GPT bought a 25 per cent interest in the Darling Park 1 & 2 office complex and Cockle Bay Wharf from Canadian group Brookfield for $531m.

The move opened the way for GPT to drive the development of the planned $2bn fourth tower at the complex as the Darling Park area is overhauled.

While the final details of the Circular Quay deal are not known, GPT and its unlisted office fund could team up to buy out Poly entirely, or the Chinese group may stay involved. Both parties declined to comment.

GPT and its office fund have worked together on other Sydney deals and now hold a combined 75 per cent interest in the Darling Park 1 & 2 and Cockle Bay Wharf.

Poly is being advised by real ­estate agency Knight Frank’s Ben Schubert, Paul Roberts and Jonathan Vaughan, but they did not comment.

The Chinese group earlier this year embarked on a process to find partners on 49 per cent interests in each of its flagship Sydney and Melbourne projects.

Both towers are close to winning precommitments to get under way, with IWG interested in the Sydney space and Myer chasing the Melbourne asset.

Poly flagged plans to develop and partially own the towers. It pitched bringing in a partner as part of a strategic play to expand its global asset management ­business, which has a focus on value-add opportunities and ­developments.

The Sydney tower is advancing, with construction group Watpac undertaking early contracting works. The 17,000sq m office project is billed as Poly’s first local ­office site and is timed to capitalise on the tight leasing market.

It will sit at 210-220 George Street. Architecture firm Grimshaw won a design award for its work on the project.

The tower is a boutique alternative to the upcoming AMP Capital’s Quay Quarter Tower and Lendlease’s Circular Quay Tower.

In Melbourne, the Chinese-backed developer has begun early works on the 24-storey tower at 1000 La Trobe Street, Docklands, which will span about 31,500sq m