Sydney office market engulfed by new tech tenants
The top end of Sydney’s office tower market is being dramatically reshaped by technology tenants that are turning parts of the city into hi-tech zones.
The latest development as part of this trend will probably see US group Salesforce anchor the planned $1.5 billion Lendlease tower at Circular Quay.
The complex, whose low-rise component has already drawn interest from a unit of the Commonwealth Bank, will probably serve as the new local headquarters for Salesforce as it undertakes a rapid expansion.
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The company is in talks to shift from Tower Three of the Darling Park complex in Sussex St and the move could see it take about 25,000sqm of high-rise space in the proposed complex.
This take-up, alongside the Commonwealth Bank unit that is interested in about 20,000sqm rise, would kick-start the project.
In a staggered shift, parts of the Colonial First State Global Asset Management business may move to the Barangaroo South harbourside precinct, while elements of the wealth operation are looking to go to Circular Quay.
Japan’s largest bank, Mitsubishi UFJ Financial Group, bought Commonwealth Bank’s global asset management arm in October last year in a $4.1 billion deal that is still being finalised.
The bank, the developer and agents JLL and Cushman have declined to comment and Salesforce did not return calls.
Locking down the tenants would allow what is billed as Sydney’s tallest office tower to proceed and round out a lengthy play by Lendlease and its partners.
Lendlease won the backing of China’s Ping An Real Estate and Japan’s Mitsubishi Estate Asia for the project in late 2016. Ping An Real Estate has a 50 per cent interest in Circular Quay Tower while Mitsubishi Estate Asia has a 30% stake and Lendlease has 20%.
Lendlease drafted in top British architect Foster + Partners to design the $1.5bn project, which is being pitched as Sydney’s tallest office building.
The Circular Quay precinct at 180 George Street has as its centrepiece the office tower with a roof structure of up to 263m high.
The area has attracted a wave of new office developments, with fund manager AMP Capital locking in accountants Deloitte last month for a major precommitment in its new $3 billion tower.
This left Salesforce with few premium accommodation options in the area as Mirvac is still preparing its 55 Pitt St project and Poly Group’s tower is a boutique development.
Technology tenants are reshaping the entire Sydney CBD.
The precinct around Central station has drawn in software company Atlassian, Martin Place is building up a Silicon Alley that has attracted the likes of LinkedIn, and e-commerce behemoth Amazon is headed to a Market Street building by Charter Hall.
This article originally appeared on www.theaustralian.com.au/property.
