Superannuation fund-backed ISPT has come out on top as the buyer of a near-$1 billion tower being developed by investment bank Macquarie Group in the heart of the Sydney CBD.
ISPT was the last group standing on Tuesday after a five-month bidding process for 39 Martin Place. Property heavyweights Investa and Cbus Property made it to the final stages while Dexus and Charter Hall were among those that showed early interest.
The 30,000sq m tower is one of two buildings being developed by Macquarie as part of the city’s over-station development for the new Martin Place Metro station.
With net average rents expected to be about $1500 a square metre – some of the highest in the Sydney CBD – the tower is likely to transact on a yield of between 4.25 per cent and 4.5 per cent – with the total price expected to push $950 million.
Macquarie won the right to build two towers at the north and south entrances of the future station after an unsolicited proposal to the NSW government in 2017. It paid $355 million for the air rights in 2018.
Architecture firm Tzannes designed the office tower while Lendlease has been appointed to build both towers and the new metro station.
The 29-storey south tower is located on the site of the former Tiffany & Co flagship store and will have naming rights for its new owner.
Macquarie will retain the larger north tower – which will rise to 39 storeys with 75,000sq m of office space – with the integrated station precinct to be completed in 2024.
With limited commercial assets for sale in a competitive and heated CBD market, property players are looking to development opportunities to find value in the city and to continue to grow earnings for investors.
There are several other over-station developments in the works. Canada’s Oxford Properties is developing a build-to-rent project over the Pitt Street metro station while John Holland and Mirvac will build three skyscrapers and two smaller towers above the Waterloo metro station.
On Sydney’s north shore, Lendlease won the rights to develop a 40-storey tower over another new metro station, Victoria Cross. The skyscraper will include about 58,000sq m of office and retail space.
The metro system, with 31 stations, is expected to be up and running in 2024.
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