Poly to press 'go' on George St tower despite GPT exit
Chinese developer Poly is confident it has the fiscal muscle to go it alone on a $500 million-plus office development at Sydney’s Circular Quay after ASX-listed GPT Group walked away from a mooted investment in the project.
GPT and its unlisted office fund had been carefully weighing a half stake – worth between $260-$270 million – in the George Street project. In recent weeks, their investment committees ultimately declined to proceed, according to senior sources.
With demolition of the previous buildings at 210-220 George Street nearly complete, Poly is preparing to press ahead with construction of the 17,000-square-metre building without securing pre-commitments from an anchor tenant or having locked in a capital partner.
That confidence is underpinned by Sydney’s tight commercial property market where vacancy is below 4 per cent.
“We are excited to start construction on our flagship commercial property in Sydney. We are fortunate that we are in a financial position to do this,” Han Sun, executive director of Poly Global Capital and Asset Management, told The Australian Financial Review.
Last year Poly invited interest for a stake in the George Street development. Since then there have been several approaches for the possible sale of a portion of the property.
“Naturally, we review any unsolicited approaches. The details of any of these conversations remain confidential,” Mr Sun said.
“Any transaction that we may be working on is treated as commercially sensitive. It is not our practice to speculate on any possible future transactions.”
Poly has appointed architecture firm Grimshaw to design what will be its first local office development, a 26-level tower to be known as the Poly Centre.
As demolition nears completion and the next stage of basement excavation nears, the Chinese developer has been expanding on several other fronts as well.
Earlier this month it bought a 26-storey office tower in the Sydney CBD for $270 million.
The property at 59 Goulburn Street was bought with approval for redevelopment into a 38-storey tower with 407 hotel suites and 90 residential units along with retail and office space, although Poly does not have plans to pursue a development at this point.
The Goulburn Street aquisition was the second asset globally to come onto its new funds management platform as it seeks to diversify beyond property development.
“Our focus is residential, mixed use and commercial development and assets in premium locations as well as areas that have been identified for future growth by planning authorities,” Mr Sun said.
In addition to Sydney, Melbourne and Brisbane, Adelaide, Canberra and Auckland are all markets with potential for acquisitions by Poly as it looks to extend its exposures.
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