Lendlease leads race to acquire $260m Sydney CBD site

Lendlease is heading the field to buy the building at 10 Spring Street, which is set to change hands for about $260m.

Lendlease CEO Steve McCann. Picture: Britta Campion

Development and construction giant Lendlease is edging closer to extending its grip over a key block in Sydney’s central business district as it eyes the purchase of a tower being sold by Cen­turia Capital’s unlisted property arm.

The group, potentially with a partner in tow, is heading the field to buy the building at 10 Spring Street, which is set to change hands for about $260 million. While the transaction is yet to be finalised, the company is favoured to buy the building after a race including an Asian party and the listed Dexus Property Group.

The property could form the basis of the Sydney CBD’s next supersite, making it particularly attractive to Lendlease as its Barangaroo South precinct is completed and it stocks up on sites for the city’s next cycle.

Lendlease is busy elsewhere in Sydney and last December won the support of China’s Ping An Real Estate and Japan’s Mitsubishi Estate Asia for its proposed $1.5 billion Circular Quay Tower, that is being pitched as Sydney’s tallest office building.

An unlisted Centuria fund bought 10 Spring St from John Swire & Sons in 2013 for $91.64m and investors stand to reap a significant uplift as the firm also repositioned the building so it produces attractive rents.

The 13,871sq m property, known as Swire House, will also benefit from Sydney’s rising rents. About 53 per cent of leases come up for renewal in the next two years when city rents are forecast to surge.

Josh Cullen and Rick Butler of Inc Real Estate and Simon Fenn, Graeme Russell and Ben Azar of Savills are handling the sale. The agents and parties did not return calls.

Lendlease hopes the site be combined with surrounding properties to form the site for a 300m tower.