Google swoops on Channel 7’s Sydney digs
US technology giant Google has swooped on the buildings on Sydney Harbour that house the Seven television network in a deal worth more than $150 million.
The real estate play dramatically expands the group’s holdings in the technology hub of Pyrmont and may be viewed as yet another sign that the US technology giant is eating up traditional media players.
Buying the properties, on Darling Island Rd and Pirrama Rd, will give Google a stranglehold over Sydney’s prestige Darling Island precinct.
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Seven is consolidating its offices in Redfern later this year. Google in January struck a deal to take up all space in the nearby Fairfax Media building at 1 Darling Island Rd. The newspaper company is now looking for a new home.
Google already occupies the entire workplace6 building across the road from the Seven Network buildings.
However, property insiders says Google’s move is just a medium-term solution and that it will continue to weigh up its longer term space requirements.
Google has been tied to a host of projects as developers believe it could anchor a new technology precinct in the city and the company has been vocal about its push to support local hi-tech industries.
But finalising a property deal in Sydney remains tough. The NSW government in April rejected a plan to create a Silicon Valley-style strip on the old railyards near Redfern proposed by listed group Mirvac.
That developer may still advance a scheme on that site but will face fierce competition from rivals, including Dexus, which is working up plans for a Google headquarters at its office towers near Central Station.
Google last year walked away from plans with the state’s developer UrbanGrowth to convert the White Bay power station in Rozelle into its headquarters and subsequent talks about a site at the University of Technology Sydney were not finalised.
Google’s purchase is another sign that Sydney’s residential development boom is losing steam. Chinese-backed group Aqualand sold the property, which is part of the broader REVY site it bought in 2015 from a consortium including Citta Property Group, Seven Group and Greg Shand of Barana Group for $180m.
Aqualand’s exit is profitable and it is also undertaking a luxury apartment development on a slice of the REVY parcel.
The Jin Lin-led company has sold some buildings out of its near 20-strong empire across Sydney not suitable to be immediately converted to units. It has also kept some office towers where it can benefit from rent rises and is pouring its energies into its flagship apartment scheme at Central Barangaroo.
Google’s move also shows the switch from residential developers dominating the purchase of Sydney Harbour properties.
The main complex, at 34-38 Pirrama Rd, consists of two waterfront lots which house three prominent buildings. They are leased to Seven until November 30, giving the TV station time to shift to Redfern and Google time to work up its plans.
The deal was brokered by CBRE’s Justin Brown, Peter Krieg and Sharon Yang.
This article originally appeared on www.theaustralian.com.au/property.
