Hong Kong authority set to buy major stake in Sydney’s Wynyard Place

The move comes at critical juncture for Hong Kong, as it is wracked by political protests and commercial and residential property investors are looking to shift their funds out of the troubled territory’s market.

The move by the HKMA is in keeping with its record of investments in high-profile Australian towers, which include a slice of the Barangaroo precinct on Sydney Harbour.

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But it comes at a sensitive time as authorities have attempted to discourage capital flight from the territory and Hong Kong faces the prospect of an economic slowdown in the wake of the worsening political crisis.

The Australian revealed in June that funds manager AMP Capital was in talks to increase its stake in the landmark Wynyard Place development.

It can now be revealed that AMP move is being made on behalf of separate account client, understood to be HKMA, although the funds manager has repeatedly declined to comment.

AMP Capital already has half interest in the under-construction tower and the pricing reflects a rate for the entire complete skyscraper of about $1.8bn.

The AMP Capital’s Wholesale Office Fund last year bought a 25% stake in the office and shopping development and another of the fund manager’s clients, local group UniSuper, took a 24.9% share.

The project centrepiece is a 27-storey, 59,000sqm commercial tower, with floor plates of 2500sqm. The development also involves the refurbishment of the 12-storey Shell House into office space and shops, and the restoration of 285 George St.

National Australia Bank’s commitment will anchor the skyscraper being developed above Wynyard train station. The bank has committed to a 12-year lease for 31,000sqm from levels one to nine at 10 Carrington St.

Allianz is vacating another Sydney city property — the complex at 2 Market St, where it has a 18,000sqm lease until September 2020 — and is splitting its operations between Wynyard, North Sydney and a site in Parramatta, in the city’s west.

The development is expected to be completed next year.

AMP Capital has been building up its holdings around the area. Last year it tightened its grip on the Sydney precinct surrounding Wynyard station, buying half stakes in two buildings in Carrington Street in a $500 million deal on behalf of another mandate client, Swiss Re.

Real estate agency JLL is brokering the latest off-market transaction in Sydney but the agency and the vendor Brookfield have not commented.

HKMA was lifting its exposure to Sydney’s hot office market before the political protests broke out. It lifted its stake in International Tower One, at Barangaroo South on Sydney’s harbourfront, picking up the additional 10% stake for more than $200 million from Lendlease earlier this year. HKMA already held a $350 million interest in the 48-storey skyscraper that was completed in 2015 and valued at $2.6 billion.

HKMA last year also joined with Lendlease’s Australian Prime Property Fund Commercial to buy the group’s Timber Office building at Barangaroo South for about $250 million.

This article originally appeared on www.theaustralian.com.au/property.