An artist’s impression of Waterfront Brisbane being developed by Dexus.
Property companies are banking on a recovery in office markets around Australia, with sector leaders Dexus and Charter Hall unveiling multi-billion-dollar plans for new towers in Brisbane and Sydney.
The moves indicate confidence that office leasing will recover in the wake of the coronavirus crisis and the fall in values will not be so steep as to make new commercial development uneconomic.
Prime Minister Scott Morrison is fast-tracking 15 major infrastructure projects worth $72bn to spark job growth and property developer are laying out ambitious plans for towers that capitalise on plans to speed approval to provide both short-term construction jobs and white-collar employment.
Dexus lodged plans for a revamp of Waterfront Brisbane that would see it create a $2.1 billion precinct and Charter Hall has won approval for a $350 million university tower in the western Sydney hub of Parramatta.
The Dexus project will transform the Eagle Street Pier and Waterfront Place area and unlock the potential of the Brisbane CBD gateway site that has been underdeveloped for almost 30 years.
“Waterfront Brisbane will be a great outcome for Brisbane with the renewal of the city’s premium business district, activation of the river and improvements to the Riverwalk,” Dexus chief investment officer Ross Du Vernet says.
The project includes two new towers, riverfront dining, retail outlets and public plazas. It will create more than 1000 construction jobs and 900 ongoing support roles. The Eagle Street Pier building will make way for two towers of 49 and 43 floors across a combined 120,000sqm of office space and a retail plaza and public space.
“As our economy begins the process of recovery from the COVID-19 pandemic, it is so important to keep the momentum going with major projects,” Queensland State Development Minister Kate Jones says.
Construction on the Eagle Pier site is expected to commence in 2022 and the first tower to be delivered in 2026.
Meanwhile, Charter Hall and Western Sydney University have won approval for the first stages of their $350 million Innovation Quarter precinct at Westmead.
The project will create a hub for innovation in health, education, research and business. The two mixed-use towers at iQ will span about 28,000sqm, part of a series of commercial towers being built in Sydney’s western suburbs.
“There’s never been a more important time to focus on health research and innovation, and this project collaboration with Western Sydney University will deliver critical infrastructure to support this,” Charter Hall chief executive David Harrison says.
More than 1000 jobs are being created by the project, which he said was vital for Australians and our economy at this time.
Property deals are also being struck.
Goodman Group is selling the second stage of a project it has under way in Sydney’s Macquarie Park to a private family for about $145 million. It will sell the block at 97 Waterloo Road, anchored by Schneider Electric with Luxottica also taking space, on a capitalisation rate of about 5.1%. Jon Chomley, of Colliers International, is brokering the deal, but declined to comment.
Meanwhile the family of the late tycoon Len Buckeridge is selling the non-core property portfolio built up by his BGC empire for about $400 million.
It includes four office buildings and industrial properties around the country but the focus is on WA.
The assets are expected to sell in one line to a property or private equity buyer. The offer was handled by Aaron Desange and Chris O’Brien of CBRE, who declined to comment.
In the country’s largest office markets, Chinese company Poly Global Capital is again looking for a partner on its planned $1bn worth of office towers in Sydney and Melbourne.
It is confident it can draw partners for the stakes in its prime Sydney and Melbourne projects.
The deals will be closely watched as they will help set new post-crisis benchmarks.
The two projects are under construction, with a 27-storey commercial tower at 210 George Street in Sydney and the 23-storey tower in Melbourne’s Docklands precinct to be finished at the end of next year.
“The strategy to partner on our flagship commercial projects in Sydney and Melbourne reflects our intention to grow tenfold over the next five years,” Poly Global Capital head of asset management Paul Badenhorst says.
JLL’s Simon Storry and Rob Sewell and Colliers International’s James Barber, Adam Woodward, James Mitchell and John Marasco are handling the sale.
