GPT buys into North Sydney with plans for premium tower
GPT has become the latest major property player to buy into North Sydney, acquiring two adjacent Walker Street sites for an estimated $185 million, giving it scope to develop a premium office tower within easy reach of Victoria Cross Station.
It follows property powerhouses Lendlease, Dexus, Mirvac, Billbergia, Keppel REIT and Stockland into North Sydney, which is in the midst of dramatic change sparked by the construction of the Sydney Metro rail line.
Transport hub Victoria Cross Station is scheduled to open in 2024, offering rapid connections to the CBD, just five minutes away, Crows Nest, Chatswood, Macquarie Park and the booming north-west growth area.
The buildings were acquired by the GPT Wholesale Office Fund (GWOF), which plans to develop a 46,000sq m office tower on the site. Construction is likely to start after the opening of Victoria Cross.
“We see the potential for outperformance in North Sydney through strong rental growth off the back of stock renewal and the delivery of Victoria Cross,” a GPT spokesperson said.
“It’s also in line with the fund’s growth strategy of targeting Sydney markets.”
In the biggest buy, GWOF bought the 13-storey office building at 157 Walker Street from Marprop Real Estate Investors and its partner GLL Real Estate Partners, now owned by Macquarie Group, for around $125 million.
Marprop and GLL paid $78 million for the asset, which is well leased and offers substantial holding income, in early 2018 before upgrading the property.
Next door GWOF has bought out the six strata owners of 153 Walker Street for approximately $60 million, giving it control of 1900sq m in the heart of North Sydney.
The transactions were negotiated off-market by Cushman and Wakefield, which declined to comment.
Walker Street has emerged as North Sydney’s key thoroughfare with several developments under way or in planning.
Developer Billbergia is making strong progress on its 50-storey mixed use tower at 88 Walker Street, which includes office, retail and a 252-room Citadine hotel, bought by The Ascott Limited and the Qatar Investment Authority for $202 million.
Earlier this month, Stockland won planning approval for North Sydney’s tallest office tower, the 51-storey Affinity Place, which it plans to build on a 2300sq m site now occupied by three buildings at 110-122 Walker Street.
Stockland owned one of the buildings for more than 20 years and bought the other two in late 2019 for $121 million.
Developer Third.i received planning approval for a 22-storey office tower known as Warada on Walker at 63-83 Walker Street in April and last year sold a nearby office development to Lendlease and Keppel REIT.
Lendlease is also building the $1.2 billion integrated station development at Victoria Cross, including a 40-storey commercial tower above the station’s southern entrance.
