This article is from the Australian Property Journal archive
NEW life has been breathed into the $3 billion One Circular Quay development in Sydney, with Lendlease partnering with Mitsubishi Estate Asia in an $800 million-plus mega-deal to acquire the luxury residential and hotel project.
Mitsubishi will increase its 19.9% stake in the development to up to two-thirds, and Lendlease will take on the balance and construct the project, which is next door to its recently topped out $1.9 billion Salesforce Tower – and which is being developed in a joint venture with Mitsubishi Estate Asia, as well as Ping An Real Estate, and will be Sydney’s tallest commercial tower.
To be built on a 4,000 sqm site that includes that former Gold Fields House site, One Circular Quay will comprise a 59-level luxury residential tower designed by late architect Kerry Hill, and a separate 220-room luxury hotel tower designed by Kengo Kuma & Associates that will be a Waldorf Astoria hotel, marking the Australian debut of the Hilton-owned brand.
The deal totals $800 million in upfront and deferred consideration, with an additional $50 million payment subject to certain project outcomes.
On the sell side is AW Holding Group, which has links to Chinese development giant Evergrande.
Lendlease and Mitsubishi Estate have also previously partnered on the One Sydney Harbour development, and Melbourne Quarter’s residential East Tower.
“We are truly excited to be a part of such an iconic project for Sydney and look forward to expanding our relationship with Lendlease as we work together to deliver One Circular Quay,” said Yuzo Nishiyama, Mitsubishi Estate Asia’s head of Australia.
One Circular Quay is earmarked for completion by the 2027 financial year.
“One Circular Quay will undoubtedly become one of the most desired addresses to live and stay in the world, once again elevating Sydney’s real estate market on the global stage and further building off the sales momentum of nearby One Sydney Harbour,” said Lendlease Australia managing director development, Tom Mackellar.
“With uninterrupted views of the Sydney Harbour Bridge and Sydney Opera House, a development of this standard, in this location, is an incredible opportunity and we look forward to bringing this iconic development to market.”
The One Quay Quarter project has passed through several hands in recent years. AW Holding Group had bought the project from Chinese-backed developer YuHu Group, which bought One Circular Quay from Beijing-based heavy hitter Dalian Wanda in 2018 following pressure from the Chinese government as part of its crackdown on offshore property investment.
Dalian Wanda had created the site from the purchase of multiple buildings, including the Gold Fields House offices, and launched the project at the beginning of 2017. At the time, the project was to comprise the residential tower with 190 apartments, and the second tower that would house the 5 star, 181-key Wanda Vista Hotel – the first new 5-star hotel project to be built on Circular Quay since 1998.
However, little construction activity occurred on the site until late 2020, when Richard Crookes Construction began work on a shared six-level basement, while Hilton signed a management agreement for the hotel tower in April of this year.
Nearby, superannuation fund Rest has finalised its acquisition of a one-third stake in the recently completed 50-floor Quay Quarter Tower, four years after entering into a $900 million deal with AMP. Completed in April, Quay Quarter Tower is the redevelopment of the old 45-floor AMP Tower at 50 Bridge Street and has 89,000 sqm of offices, 95% of which is leased to tenants including Deloitte, Corrs Chambers Westgarth, AMP and others, and around 4,000 sqm of retail space.
