Ping An readies to sell its stake in Salesforce Tower at Sydney Place

Amid high prices for office towers, China’s Ping An is heading for the exits in a play that could value the striking tower at about $2.4bn.

Ping An is to exit its stake in Salesforce Tower at the Sydney Place precinct in Circular Quay.

Chinese company Ping An Real Estate is readying to bring its half stake in the $2.4bn Sydney Place development at the city’s Circular Quay to market with global office players to chase the asset.

The offshore group, which is understood to have called in real estate agencies Cushman & Wakefield and Savills, has ridden the office cycle and is betting that the prime end of the market will hold up.

Now branded Salesforce Tower, the office building in Sydney Place is the city’s tallest commercial tower.

The best office towers in the country are continuing to reap high prices even as lower end properties are struggling to keep tenants and investors.

There has been an exodus of Chinese capital from major real estate investments around the country, with both passive office holdings and apartment developments being sold off.

But Ping An’s play is a more traditional real estate move with the group capitalising on the imminent completion of the building after coming into the project just as it was getting off the ground in 2016.

Developer Lendlease last year also sold its slice of the Sydney Place development as it pours fresh capital into new projects but it and the agencies declined to comment.

At a mooted value of about $1.2bn a sale of the stake would not only be one of the largest single property deals but would also be in keeping with the strong pricing of stakes in other skyscrapers including the nearby Quay Quarter Tower.

Lendlease’s own Australian Prime Property Fund Commercial, picked up the 20 per cent stake in the Sydney Place development that was traded last year.

Experts pointed to the premium nature of the project, which is being completed by Lendlease in joint venture with Ping An and Japan’s Mitsubishi Estate Asia.

The pair emerged as backers ahead of the developer began works. US group Salesforce then emerged as anchor tenant of the ­Circular Quay development in 2019.

Despite the pandemic, it has had strong leasing activity and is hitting original leasing goals. Tenants include Greenhouse, the tech-focused growth hub from Investible, Wellington Management and The Executive Centre.

The Sydney Place precinct links to the revamped 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 area 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 a Platinum WELL Shell and Core rating and the Green Building Council of Australia’s Design & As Built 6 Star Green Star rating.

Lendlease has remained active in the area and last July snapped up the One Circular Quay site in Sydney, buying the controversial property from Chinese investment house AWH for $850m. Backed by Mitsubishi Estate Asia, it seized control of the property after years of uncertainty over its future in which it passed through the hands of Chinese property developers Yuhu and Dalian Wanda.

The site will now house a luxury apartment and hotel complex, with that element, to be a Waldorf-Astoria, already catching interest from tycoon Andrew Forrest.