Lendlease’s flagship office fund will take a 20 per cent stake in the $2.2 billion Sydney Place development, which overlooks Circular Quay and includes what will be the city’s tallest office building, Salesforce Tower.
ASX-listed Lendlease is itself developing and constructing the Sydney Place precinct through a joint venture with Ping An Real Estate and Mitsubishi Estate Asia. The latest transaction brings Lendlease’s third major area of business, investment management, into play.
The 20 per cent stake, controlled by Lendlease’s Australian Prime Property Fund Commercial, will be held alongside the interests of its co-investors in a fund also managed by Lendlease.
Designed by Foster + Partners, the centrepiece of the ambitious project is a 55-storey office building at 180 George Street, which is more than 70 per cent pre-leased and due to open later this year.
Cloud-based software company Salesforce has secured naming rights to the Circular Quay tower, after striking a deal as its anchor tenant in 2019. Other tenants include commercial real estate agency JLL, Greenhouse – a tech-focused growth hub from Investible – Wellington Management and The Executive Centre, a workspace provider.
Social media platform TikTok is also negotiating for office space in the skyscraper.
“Sydney Place brings another world-class precinct investment into our growing office portfolio,” said Micah Schulz, head of office for Lendlease Investment Management.
“It will offer great public amenity along with excellent transport connectivity and strong sustainability credentials.”
Linking to the Circular Quay harbour front, the Sydney Place precinct will include laneway space, retail and dining, and create the first major public square on George Street in decades. The retail component, spanning 24 tenancies, is fully committed.
Among them will be a three-level reinvention of Jacksons on George, a hallowed institution in the city’s nightlife scene for three decades. The bar had previously occupied the site before it was demolished in 2018 to make way for development of the Sydney Place precinct.
Founded in 1986, the bar is being reinvented as a modern Australian gastro pub in a building designed by architects Studio Hollenstein.
In its second coming, the establishment will be run by DTL Entertainment, the hospitality operator managed by entrepreneurs Paul Ford and Steve Bannigan, publican Michael Broome and Maurice Terzini, founder of flagship restaurants such as Icebergs Dining Room and Bar in Bondi.
The Sydney Place transaction is the latest in a series of major deals for Lendlease across its global platform. At the start of the month, it landed a $3 billion office development in the heart of Singapore, partnering with Singtel to redevelop the telco giant’s headquarters.
Then last week it launched a $1 billion life sciences real estate fund in partnership with Dutch pension fund manager PGGM, seeding the new vehicle with a commercial property in Japan’s Yokohama.