Lendlease teams with Japanese backer to snap up site for a $500m development

Listed developer Lendlease and Mitsubishi Estate Asia have bought a major residential site in Sydney’s eastern suburbs for a new $500m project.

Lendlease has acquired the One Darling Point site in Edgecliff.

Listed developer Lendlease has teamed up with heavyweight partner Mitsubishi Estate Asia, beating a series of high-profile ­rivals to buy a major residential site in Sydney’s eastern suburbs for a new $500m project.

They are keeping the details of the deal under wraps but have paid the site’s private owners, an entity associated with ­development company Anka Property, about $132.5m for the landmark parcel, which marks their entry into the hot luxury apartment market in the city’s inner suburbs.

The property in Darling Point was purchased as part of Lendlease’s return to Australia strategy in which it is bringing $4bn worth of capital back to local markets after making heavy losses offshore.

The company is exiting developments in Britain and the US and selling off divisions ranging from construction businesses in those markets to its stake in a local senior living business and the bulk of its local housing unit, although that $1.3bn deal has been set back by Australian Competition & Consumer Commission concerns.

Lendlease is selling in order to pump funds into parts of its operations where it believes it has a competitive advantage, with luxury property emerging as a bright spot for the developer in recent years.

It has had success in Sydney at One Circular Quay and at Barangaroo – with Mitsubishi Estate Asia backing the company’s projects at both sites – and it is also looking to enter the top end of the Melbourne market by buying a project at the “Paris end” of Collins St.

The pair are buying the site on New South Head Rd that is known as “One Darling Point” and was billed as an opportunity to acquire the “most significant address” in the eastern suburbs.

The development block sits on a historic ridge line, spans a site area of 1748sqm and carries ­approval for 8730sqm of space, which could be lifted to about 11,349sqm under the new planning rules.

While planning on the Sydney site is yet to be finalised, the vendor put forward indicative plans for a striking 12-storey mixed-use building comprising units, offices and retail.

The original scheme had 41 apartments: nine with one bedroom, 18 with two bedrooms, 12 three-bedroom units, one with four bedrooms and one with five bedrooms. It sits opposite key transport links including Edgecliff train station, and apartments would have Sydney Harbour Bridge and city skyline views.

The deal was brokered by CBRE’s Ben Wicks, Stewart Residential’s Ben Stewart and Colliers’ Miron Solomons and Matt Pontey.

Lendlease is moving at a time when private developers have set benchmarks in their luxury projects in Sydney’s east, with record-setting apartment sales becoming the norm in suburbs ranging from Double Bay to Tamarama.

It is looking to bring its own luxury touch to new projects and will throw its big name partners behind them as part of its strategy to invest in “shovel-ready” projects and to generate earnings over the next several financial years.