Lendlease sells slice of Circular Quay’s tallest tower at Sydney Place

Premium buildings are getting good prices as companies want them to bring workers back to their desks.

APPF Commercial has acquired a 20 per cent stake in the Sydney Place development at Circular Quay.

Developer Lendlease has sold a slice of the $2.2bn Sydney Place development at Sydney’s Circular Quay as it looks to pour fresh capital into new projects.

The company is planning to lift its development pipeline to about $8bn annually in coming years and has a heavy roster of local and international schemes.

Lendlease took a hit in the sharemarket rout but has recorded strong sales in both its commercial and residential arms in Australia, with high-priced luxury apartment sales at harbourside Barangaroo.

Lendlease’s flagship wholesale office fund, Australian Prime Property Fund Commercial, acquired the 20 per cent stake in the Sydney Place development from the company on undisclosed terms. But experts said the deal would reflect the premium nature of the project, which is being developed and constructed by Lendlease in a joint venture with China’s Ping An Real Estate and Japan’s Mitsubishi Estate Asia.

The pair emerged as backers of the tower in 2016 ahead of the developer seeking a major precommitment before it began building work. US group Salesforce then emerged as anchor tenant of the ­Circular Quay development in 2019. Now branded Salesforce Tower, the commercial building in Sydney Place will be the city’s tallest commercial tower.

Despite the pandemic, the tower has had strong leasing activity and is on track to achieve original leasing commitment targets. Lendlease said the project displayed its confidence in high- quality offices and the recovering Sydney market.

Lendlease Investment Management head of office Micah Schulz said Sydney Place brought a world-class precinct investment into the fund’s growing office portfolio.

“It will offer great public amenity along with excellent transport connectivity and strong sustainability credentials. It’s a true example of a next-generation, connected precinct that will benefit both the business community and public at large,” he said.

Tenants include real estate firm JLL, Greenhouse, the tech-focused growth hub from Investible, Wellington Management and The Executive Centre, a premium flexible workspace provider.

The Sydney Place precinct will link to the Circular Quay harbourfront and include laneways, retail and dining, the first major public square developed on ­George Street in decades.

Spanning 24 individual tenancies, the retail and hospitality component is now fully committed with the overhaul of the three-level Jacksons on George by Paul Ford’s and Maurice Terzini’s DTL Entertainment.

The 55-storey office building, designed by international architects Foster + Partners, has been awarded a Platinum WELL Shell and Core rating and the Green Building Council of Australia’s Design & As Built 6 Star Green Star, and is targeting a 5.5 Star NABERS energy rating.

Lendlease has been stepping up its global pipeline. It last week struck a deal with Dutch pension fund manager PGGM to create the unlisted Lendlease Innovation Limited Partnership.

The $S1bn ($1bn) partnership will invest in real estate assets in the innovation and life science space with a focus on Australia, Japan and Singapore. PGGM will hold an 85 per cent interest and Lendlease 15 per cent.

The partnership has already secured its first asset, a commercial property in Yokohama, Japan.

In Singapore, Singtel is teaming with Lendlease to redevelop its Comcentre headquarters into a $S3bn sustainable workplace.