Metrics, Billbergia to develop $3b twin tower project in Sydney CBD
Metrics Credit Partners, best known about as being one of Australia’s largest non-bank lenders, is diversifying further into equity by partnering with developer Billbergia to acquire a site overlooking Sydney’s Hyde Park for about $500 million.
The lender and developer acquired the 338 Pitt Street site – which vendor Han Group had variously put on and taken off the market over the past three years – and plan a two-tower, mixed-use development with an end value of about $3 billion, similar to the scheme already approved for the site.
“Our vision will transform this underutilised city block into a cutting-edge urban community with luxury residences supported by premium amenity, quality public domain and active place-making,” Billbergia development director Saul Moran said.
“This mixed-use development is Billbergia’s first in the CBD and heralds the renewal of the Midtown district.”
The acquisition is the latest among a growing number of equity investments being made by Metrics. Last year, the non-bank lender took control of Pacific Hunter Hospitality Group and a 500-home, 1.4-hectare North Melbourne development that were both debt-for-equity swaps.
Metrics has been the lender for several Billbergia projects, including its 88 Walker Street in North Sydney – the home of Robin Khuda’s AirTrunk – and 668-apartment Rhodes Central development based on the fringes of Sydney’s inner west.
Vendor Han Group is one of China’s largest private developers. It acquired the site in 2015, and gradually expanded it over the five-year period through a series of building purchases where it now spans almost an entire city block. The site comprises 245-247 and 249-253 Castlereagh Street, 324-330, 332-336 and 338-348 Pitt Street, and 126 Liverpool Street.
The site sits opposite the World Square precinct and is 250 metres away from Museum Station and Hyde Park. It is also a stone’s throw away from the Gadigal metro station and the Town Hall train station.
The Chinese developer had expanded the site under plans to build two 80-storey residential towers that house about 600 luxury apartments, a 158-room five-star hotel, and 5000 square metres of retail space. Under the original scheme, which held development approval, the towers were also planned to be connected by a sky bridge at levels 36 and 38.
While the Metrics-Billbergia joint venture intends to amend the development application, it will retain the core elements of Han Group’s plans for the site, such as the luxury apartments, hotel and retail space. The towers will have a range of one, two and three-bedroom apartments alongside penthouses.
For Metrics, which has grown to have $22 billion worth of funds under management, the coup is an opportunity for it to build a landmark development and be known as more than the country’s largest non-bank lender.
At the same time, it is another sign of Chinese developers exiting Australia following decades of pouring money into high-rise apartments, lured by the prospect of quick capital gains in a low interest rate environment.
Many have since left Australia due to Beijing discouraging them from building luxury projects in offshore markets. China’s slowing economy and a property crisis has also meant many of the country’s developers have been forced to sell off offshore assets to shore up domestic operations and pay off debts.
The exit by Chinese developers, combined with listed groups being constrained in their buying, has allowed private companies to snap up many of the largest development prizes across Australia.
Metrics and Billbergia intend to start demolishing the office currently on the site next year.
