Lendlease chases Vic Cross partners as North Sydney fires

A 42-storey commercial space is planned above the Victoria Cross Station.

Lendlease is backing its conviction in the $1.4bn tower and retail complex it is building above the Victoria Cross Station ­development in North Sydney and is seeking partners for the huge site.

The developer has tapped real ­estate agencies Knight Frank and JLL to find partners that would own ­between 25 per cent of the planned skyscraper above the forthcoming Sydney Metro station.

The building’s success will be a key test of the North Sydney market and the depth of demand for large forward funding-style transactions.

Lendlease sold a 25 per cent portion of the development to its own unlisted APPF Commercial fund in 2019 and is winning interest from tenants.

The developer would use the same model as its Circular Quay project, Sydney Place, where the Salesforce Tower will become the city’s tallest offices at 55 storeys. That project is a joint venture with China’s Ping An Real Estate and Japan’s Mitsubishi Estate Asia, and will be completed this year.

Construction has begun on Lendlease’s commercial tower above the upcoming Victoria Cross metro station in North Sydney.

In North Sydney, a group or consortiums could come in and share in the upside as the entire area is rerated and major tenants come in. Lendlease appeared to have hooked WPP but that proposed deal fell away.

Now, larger tenants are being tempted by both new transport options and a shift towards major centres in the wake of the pandemic. The tower is slated to be completed in 2024, and Sydney Metro City and Southwest services are set to start in that year.

Building is due to begin on the flagship offices, Victoria Cross Tower, shortly. Rising above North Sydney’s new metro station, the 42-storey tower is billed as having the latest in workplace experience and sustainable space.

It will be net zero in terms of carbon emissions, powered by 100 per cent renewables and is targeting a Platinum WELL and 6-Star Green Star rating. Designed by Bates Smart, the premium-grade building will have a multipurpose hub space and include outdoor balconies and green spaces to promote health and wellbeing.

On the ground level, the lobby will flow into a laneway where there are more than 20 new retail and hospitality outlets planned.

Victoria Cross Tower will accommodate up to 7000 workers in about 58,000sq m of hi-tech, premium space for office and retail use, boosting North Sydney’s economic ­potential.

How the office tower above Victoria Cross Station is expected to look.

“We know that North Sydney’s CBD is on a path of complete transformation, and connectivity will be key with the introduction of Sydney Metro’s new Victoria Cross Station,” Lendlease managing director of development Tom Mackellar said. He declined to comment on the partner search.

There has been a burst of activity in North Sydney. Investment bank UBS is closing out a deal to buy 73 Miller St. The bank’s asset management arm is buying the tower being sold by Asian warehousing giant ESR for close to $400m.

GPT’s funds arm in June snapped up one of the next top development sites in Walker St, where a large skyscraper could be built.

Stockland has approval for a 51-storey tower that would become the area’s tallest office building. Private Billbergia is completing a 50-storey hotel and office tower at 88 Walker St, and developer Third.i also has approval for a 22-storey boutique office at 63-83 Walker St. Both Pro-invest and Investa also have office schemes.

Lendlease got into North Sydney in December last year, when it acquired the Blue & William development for $327.7m.

The company’s funds unit picked up the 14,000sq m project from the private Third.i with the backing of Singapore’s Keppel REIT.