Lendlease adds to North Sydney revival with $1.2b metro station tower

Global property giant Lendlease’s $1.2 billion office tower above the Victoria Cross metro station will set a high bar for the revival of the North Sydney precinct, once the poster child for the failed property and dotcom busts of the early 2000s.

After years in the wilderness, North Sydney is coming back to life with an array of heavy-hitting tenants and developers. There are now $11 billion worth of new projects on the drawing board or under construction.

Render of the $1.2 billion Victoria Cross Station tower at North Sydney being developed by Lendlease.

Lendlease, which is developing the metro station project on behalf of the NSW government, started work on Monday on the 42-storey skyscraper component on the corner of Miller and Berry streets, in the centre of North Sydney.

The premium-grade tower will be net-zero carbon and powered by 100 per cent renewable energy. It sits atop the station and includes laneways and restaurants fronting Miller Street on the ground levelwith a multipurpose community space and sweeping views of Sydney harbour and the city on the top floors.

Lendlease managing director of development Tom Mackellar says the tower is on track for completion in 2024, with Sydney metro City and Southwest services set to start in the same year. Victoria Cross Tower is 25 per cent owned by Lendlease’s flagship Australian office fund, APPF Commercial.

We know that North Sydney’s CBD is on a path of complete transformation, and connectivity will be key with the introduction of Sydney Metro’s new Victoria Cross Station

Lendlease MD development Tom Mackellar

“The sustainability credentials of the tower will be at the next level with net-zero carbon, 100 per cent powered by electricity - so no gas - and the concrete will be a mix of cement and recycled industrial waste,” Mackellar said at the North Sydney site.

“We know that North Sydney’s CBD is on a path of complete transformation, and connectivity will be key with the introduction of Sydney Metro’s new Victoria Cross Station.”

The tower, designed by Bates Smart, is targeting a platinum WELL certification, the highest standard for sustainable buildings, and 6-star Green Star rating.

Mackellar said Victoria Cross Tower would accommodate up to 7000 workers across 58,000 square metres of high-tech, premium space for office and retail use, “supercharging North Sydney’s economic potential as an extension of the Sydney CBD”.

He confirmed Lendlease was in discussions with tenants for the Victoria Cross office tower. Lendlease is also talking to operators to run a separate bar and restaurant that will have hallmarks of Matt Moran and Solotel’s popular Barangaroo House and the former Jacksons on George pub in the city.

Victoria Cross metro station, North Sydney, is under construction by Lendlease.Credit: Edwina Pickles

Lendlease is also developing a $327.7 million office tower on the corner of Blue and William streets in North Sydney with Singapore-based Keppel REIT, with a focus on “wellness and tenant experience”.

At the Property Council’s last count, the office vacancy rate in North Sydney was 16.6 per cent, fuelled by the new buildings, compared with Sydney’s CBD rate of 10 per cent.

CBRE head of office leasing North Sydney Stefan Perkowski said the precinct was undergoing a “transformative journey” with new residential and commercial office towers.

He added that there has been solid leasing activity that will absorb some of the vacant space in the coming years.

Perkowski said in 2022 and into 2023, development in the area would be dominated by Lendlease’s Victoria Cross and 2-4 Blue Street developments, and LaSalle Investment Management’s project at 88 Walker Street.

“The opening of the Sydney metro in 2024 will significantly improve connectivity with both the Sydney CBD and suburbs,” Perkowski said.

The latest lease deals include workplace network IWG and skin specialist Galderma, which leased the remaining floors at 1 Denison Street, totalling 5750 square metres.

“We are seeing larger occupiers still considering North Sydney as a preferred location, equating to more than 15,000 square metres of potential net absorption. These occupiers include SMEC, Hollard, Nokia, Equifax and WSP,” Perkowski said.

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