Chinese-backed Maville Group has proposed a $66 million office tower in North Sydney, with nearly 20 per cent of the property devoted to coworking, small businesses and startups.
Led by Nick Shen, the developer seeks to demolish the four-storey building at 173 Pacific Highway to make way for a 11,000-square-metre office building over 33 levels, partially cantilevering above the eight-storey 116 Miller Street, which is also owned by Maville.
Six of the proposed 33 floors have been earmarked for coworking.
Floor plate sizes are expected to be between 480 and 540 square metres and Maville plans to offer single and part-floor office spaces for “smaller, newly established or growing companies” seeking to be located closer to North Sydney’s large corporate tenants.
“The specific office space being delivered on the site will contribute to the diversity of the office market in delivering smaller office floor plates and coworking spaces,” the planning application says.
While the number of big coworking operators active in North Sydney is relatively low – only Regus, Servcorp and Christie Spaces operate in the area – this is set to change, with WeWork opening its first site on the north shore in April, spread over five levels at 50 Miller Street, North Sydney.
Maville’s existing four-storey building, occupied by the the Australian Catholic University’s School of Physiotherapy, is “one of the last critically underdeveloped sites in the heart of the North Sydney CBD”, according to the application.
The site is bordered on all sides by properties that have either maximised the development potential of the land, or are unlikely to undergo urban renewal in the near future due to recent major refurbishments.
The cantilevering approach aims to boost the functionality of the floor plates by making the most of the air space above 116 Miller Street, which cannot be further developed under current planning controls.
Maville acquired 173 Pacific Highway and 116 Miller Street for $133.88 million in 2017 – the strongest pure investment sale of the year in North Sydney.
The developer has been an active player in the Sydney market, notably selling 333 Kent Street in the CBD for a symbolic $88,888,888 to fund management groups iProsperity and China-based Bridge Capital in 2016.
Despite the recent general decline in interest from foreign investors in Australia, the north shore continues to be an attractive market, with offshore buyers accounting for more than 80 per cent of the area’s $2.14 billion investment capital in the 12 months to January 2019, according to Knight Frank.
Designed by Woods Bagot, the building has a partly double and triple-height amphitheatre proposed between levels 28 and 30, incorporating a multi-function meeting space and lounge. The space, designed to improve social interaction and collaboration, will be open to coworking users and office occupants within the building.
Aside from coworking, the development will include a double-height lobby within the three-level podium, 22 floors of traditional office space, end-of-trip facilities in the basement and 25 square metres of ground-floor retail.
Maville did not respond to requests for comment before publication.
An undercover pedestrian connection linking Pacific Highway and Miller Street through the site could be proposed in a separate application in the future.
Maville’s Miller Street building is opposite the future Victoria Cross Metro Station’s southern exit and its 42-storey over-station development on the corner of Berry and Miller streets, the first stage of which was given the green light in December 2018.
But it won’t be the tallest, with Billbergia’s resubmitted plans for a 48-storey hotel and office tower at 86-88 Walker Street, partially cantilevering above the Firehouse Hotel, gaining approval in February.
Office vacancy in North Sydney edged up from a 16-year low of 6.5 per cent to 6.8 per cent in the six months to January 2019, Property Council of Australia data shows, as some larger tenants including MasterCard relocate from the suburb.
The suburb’s prime office market is tighter at 3.5 per cent, Knight Frank figures show.
While no new office buildings were added to the North Sydney market in 2018, 145,000 square metres of office space is due to be completed by 2020, with the three major projects being 100 Mount Street, 1 Denison Street and 118 Mount Street.
The new developments to be delivered between 2019 and 2020 will be the biggest addition of office space in any two-year period for the North Sydney market.