KPMG, PwC, Accenture bookings a boost for Barangaroo
Consulting firms KPMG, PwC and Accenture have renewed large leases at Lendlease’s Barangaroo office towers, a vote of confidence for the Sydney precinct previously hit by the exits or downsizing moves by other blue-chip tenants.
KPMG told its staff on Tuesday afternoon it was renewing its lease at Lendlease’s International Tower Three. KPMG has been in that office since 2016, and the new deal will have the company retain its existing footprint of about 33,000 square metres across 14 floors until 2034.
PwC also renewed its lease with 10 floors at International Tower One, while Accenture finalised a deal to stay put at the six-floor International House, opposite the International Towers. Both of these leases were renewed last year.
The leasing deals are a welcome boost for the Barangaroo precinct after a tough two years of tenants moving elsewhere or reducing their footprints in response to the new world of flexible work.
According to the Property Council’s latest office vacancy data, older offices and those located outside the CBD core have felt the brunt of those flexible work headwinds.
Secondary CBD offices nationally posted a higher vacancy rate of 14.5 per cent compared to the 12.9 per cent of prime offices. In Sydney, where prime office vacancy rates were higher compared to the secondary office, that was due to high vacancies at the non-core located Darling Park Towers.
Barangaroo, a non-core CBD precinct, has suffered as well, with notable exits such as that of commercial law firm Gilbert + Tobin. The law firm confirmed in October it would move to the second tower being developed in the Chifley Square precinct. It is still operating out of Barangaroo until its lease expires in about five years’ time.
Further pressure
Over the past two years, Westpac has also downsized its office requirements at its Barangaroo locations – Lendlease’s International Tower Two and the Mirvac and ISPT-owned Westpac Place, with more than 20,000 square metres across the two buildings made available for sublease. Westpac has since found TPG to take up the International Tower Two floors, while Optiver took most of the Westpac Place office space.
Despite those headwinds, Lendlease’s Barangaroo assets – which include the three International Towers, International House and Daramu House – have signed about 123,000 square metres of lease renewals and new leases in the past 18 months.
Alongside the consulting firm renewals, other leasing deals include options trading giant Susquehanna doubling its Tower One footprint to two floors.
Lendlease’s Barangaroo assets have a 7 per cent vacancy rate as a result of the renewals, which was better than the Sydney CBD office vacancy rate of 12.2 per cent.
Notwithstanding Lendlease’s wins for its Barangaroo office space, the precinct may yet face further pressure as companies downsize or move elsewhere.
Down the road from Lendlease’s International Towers, at the Charter Hall-owned 10 Shelley Street, five of the tower’s 15 floors were available on sub-lease from SunCorp and financial software and data firm Iress downsizing their office requirements.
SunCorp had put up two floors for sublease last year, which were then filled by accounting firm HLB Judd and Singtel’s NCS. But it has recently made another two floors available. Iress, meanwhile, has three floors available for sublease.
