Lendlease offloads Darling Square for lucky $88m

The $5.09bn developer is capitalising on demand for well-located restaurants and shopping precincts.

Top class retail properties are defying the consumer spending slow down, with development company Lendlease offloading the Darling Square Retail precinct in Sydney for $88m to an Asian investor.

The low profile Yoon family has snapped up the bustling complex in Haymarket on the edge of the city’s Chinatown in a sign that the best positioned properties will keep drawing investment.

The family, best known for owning hotels, will take of control of the precinct that was one of the final elements to be sold off by the listed developer after its overhaul of the area.

Darling Square Retail sports some of Sydney’s best retail and dining offerings, with 44 retailers across a total footprint of 9,639sq m.

Colliers’ agent Lachlan MacGillivray handled the sale that showed a rate of $19,485 per sq m.

“Australian CBD retail precincts are some of the most tighly held,” Mr MacGillivray said. “Following years of disruptions, CBD centres experienced a return to normalised conditions in 2023, which we expect to steadily build.”

“The marked increase of CBD visitation and strong customer spending on dining, coupled with the return of international tourism and overseas students, generate optimism that future sales growth will be sustained.”

Lendlease has been selling off retail properties at harbour precincts it developed. In 2022, it sold the building spaces which house some of the top restaurants in the Barangaroo precinct for about $96m to Brisbane-based funds house Marquette. The restaurants, which are set in the first two harbourside residential buildings, included Asian-inspired restaurants Lotus and Cirrus.

Four years earlier, two Asian-backed investment groups tied up deals to buy two of the city’s most distinctive buildings from Lendlease. It reaped more than $100m from selling the Kengo Kuma-designed The Exchange at Darling Square and a hospitality complex on Barangaroo South’s waterfront to separate parties.

The latest sale offer comprised the fully-occupied retail stratums arosss the complex that has a leased area of 4,516sq m. It has restaurants, takeaway stores, coffee shops, bubble tea outlets, ice cream and dessert bars as well as a McDonald's and Starbucks.

Completed in 2019, the overall Darling Square precinct is a mix of about 1,500 residential units, office spaces, retail community and leisure uses, bed student accommodation and a luxury hotel.