Sydney CBD gem to draw heavyweights as redevelopment beckons
An artist’s impression of the development scheme for 60 Margaret St, Sydney.
Listed company Mirvac and US private equity house Blackstone are beginning the sale of Sydney landmark 60 Margaret St and MetCentre, and believe the complex could sell in the early $900m range.
The offer is the largest in the Sydney CBD since the pandemic struck, and its scale is tipped to draw global institutions which could team with local funds managers on a longer-term overhaul.
The precinct around the mixed office and retail property has been dramatically transformed by the light rail and the development of Brookfield Place Sydney above the refreshed Wynyard station.
The site offers the opportunity for a longer-term redevelopment to create one of the largest towers in the city, in keeping with the desire of corporate tenants for newer buildings.
While a new owner could take the property, developed in 1980 and progressively refurbish, both Blackstone and Mirvac have done well out of the asset.
The US private equity house bought a half share of the Margaret St asset from Hong Kong-based PAG in 2018 for about $420m. PAG had picked up its stake in 2015 from superannuation fund MTAA Super for just over $300m.
Mirvac flagged about $1.3bn of asset sales at its results last month, including the Margaret St assets and a Perth tower, Allendale Square, which Centuria Capital is chasing.
The offer is being handled by Cushman & Wakefield’s Josh Cullen, Mark Hansen and Bridhe Woods, and JLL’s Luke Billiau, Simon Storry, James Barber and Sam Hatcher.
An artist’s impression of the development at 60 Margaret St, Sydney
The property comprises both the city’s sixth-largest office tower and the MetCentre at the foot of the building. The 36-storey offices has big tenants including ING Bank, Cliftons and OzForex in its 40,772sq m of A-Grade space.
But one drawcard is that the MetCentre is well integrated with offices and has 6500sq m of retail space linked to Wynyard station. It has a Woolworths and about 75 specialty shops.
“The asset is underpinned by a commanding position on George St and Margaret St, a diverse tenancy mix, exceptional onsite amenity and unrivalled, direct underground access to Wynyard station,” Mr Cullen said.
“As a redevelopment play, 60 Margaret St and MetCentre afford multiple value-add opportunities for the new owner to make their mark on the Sydney CBD.”
At more than 4400sq m, the property is one of the largest land holdings in the core precinct.
“The rarity of 60 Margaret St is anticipated to generate significant local and offshore buyer interest given its significant redevelopment potential,” JLL’s Mr Billiau said.
“It’s the last piece of the puzzle in the extensive reinvigoration of Wynyard.”
The sale will help Mirvac fund both its development pipeline and deal with its new funds management unit.
Morgan Stanley analysts said Mirvac’s gearing was in check, but there was a growing focus on funding upcoming requirements, including $500m of liquidity for the AMP Capital Wholesale Office Fund, which Mirvac is slated to take on running soon.
Mirvac confirmed it was selling the property. “Given strong investor demand for well located urban assets, we feel it is the opportune time to sell 60 Margaret Street and the MetCentre,” a spokeswoman said.
