The $5b ‘repair job’ that is reviving Circular Quay
Lendlease, and its capital partners, have committed over $5.3 billion to what the global group’s Australian chief executive, Dale Connor, calls the “repair” of Sydney’s Circular Quay.
The projects – the completed Salesforce tower, the now emerging One Circular Quay apartments, the coming Waldorf Astoria Hotel, and the public spaces in between – are both a nod to Lendlease’s past and a pointer to its future.
“These are the times when opportunities present themselves for Lendlease and their capital partners,” Connor said when we met on site last week.
“It’s hard yards in property at the moment. But property is cyclical, and I want to be ready when it happens.”
Of course, others have made, and will continue to make, big contributions to the repair of Circular Quay, including the City of Sydney, AMP, Dexus, Mirvac, and Transport for NSW.
At the eastern end of the precinct is the $3 billion Quay Quarter redevelopment, opened last year, and being followed by the full refurbishment of the iconic 33 Alfred Street tower.
Commenced by AMP Capital, the precinct is now managed by Dexus and owned by the Dexus Wholesale Property Fund, the Mirvac Wholesale Office Fund and, in part, by Rest Super.
For Lendlease, the developments at the Quay showcase a number of elements that will mark its future: a continuing focus on the workplace, on place-making, on working with governments, and most importantly, working with partners.
Lendlease’s global chief executive, Tony Lombardo, wants his group to become “an investments-led business”, aiming to grow funds under management by 40 per cent, to $70 billion, by June 2026, and deliver results with a higher proportion of recurring and annuity earnings.
Much of that growth is expected from Australia, where the group already has $33 billion in funds under management, but where many of its rivals also aim to boost their fund management portfolios.
Connor says the investment-led focus, gives “strong purpose” to Lendlease’s broader activities.
“We have strengthened our connections to international capital in the past five years,” he says. “And we have the ability to create product; not only from scratch but also to step in and add value to existing assets.”
Mitsubishi Estate Asia partnered with Lendlease on the development of the Waldorf Astoria – now presold to the Forrest family’s Tattarang private investment company for about $520 million – and on the One Circular Quay apartments.
Mitsubishi Estate also took a 30 per cent stake in the Salesforce Tower and its surrounds, known collectively as Sydney Place, alongside the Lendlease-managed APPF Commercial, which has a 20 per cent stake, and Ping An Real Estate, which holds a 30 per cent stake but has attempted, unsuccessfully, to sell out.
