TPG rings up new space in Barangaroo in cross-harbour move

TPG is heading to Barangaroo from North Sydney.

Westpac has found one of the country’s top telcos to take up four floors it will vacate at Sydney’s Barangaroo harbourside precinct as big banks shrink their office footprints.

Listed telco TPG Telecom is making a dramatic move from North Sydney, where both TPG and Vodafone – which merged in 2021 – were mainstays of the market.

The surprise move will see TPG sublease around 9000sq m in Barangaroo and leave it to sublease space in the North Sydney tower which it is leaving. It has a lease until 2028 but expects to make financial savings, although it has declined to comment on a rumoured rent-free period for the shift across the harbour.

The telco’s hunt for a sublease tenant adds to the pressures in the North Sydney market, where big developers are looking to secure tenants to kick off towers.

TPG Telecom is the nation’s third-largest telco and owns Vodafone, iiNet, Internode, and felix. It is consolidating not only from North Sydney, but will also move most teams in inner-city Glebe to Barangaroo.

TPG Telecom will occupy levels 24 to 27 – made up of three production floors and one client and showcase floor – in Tower 2 at Barangaroo. Other occupants include remaining Westpac, BT, St George units, as well as Facebook, Cognizant and Brennan.

The new office space will see the telco boost its floor space by more than 900sq m but have fewer floors, boosting cross-functional interactions. There will be collaboration spaces, ranging from individual focus pods, informal and open project areas and meeting and boardrooms.

The jewel in the crown for the building will be a level 27 client and concierge floor, which is triple the size of the North Sydney facility.

“We are thrilled to announce TPG Telecom’s move to Barangaroo, where we will bring together more of our teams under one roof to connect, collaborate, create, and celebrate,” TPG Telecom group executive, people experience, Vanessa Hicks, said.

The move happens in August, allowing TPG Telecom to capitalise on the modern corporate office spaces, better meeting rooms, upgraded working spaces and greater access to facilities, food and entertainment.

TPG Telecom has a flexible workforce policy with a hybrid work model of “it’s not 0 days, but it’s not 5 days”. “This allows us to remain flexible, so our teams can co-create a way of working that best suits the needs of our people, our customers, and our organisation,” a spokesman said.

The bank’s cutback of its space at Barangaroo may signal a move away from that precinct after it was instrumental in the launch of Lendlease’s trio of office towers on Sydney Harbour. It is likely to consolidate back to its own headquarters at 275 Kent St.

A Westpac spokeswoman confirmed the bank was subleasing space in its Barangaroo office “as we continue to review our property footprint in line with the bank’s simplification strategy”.

“We are embracing a new way of working with our hybrid working model, which gives our people the opportunity to connect in person while retaining the benefits of remote working,” she said.

The office tower market has been hammered by higher interest rates which have hit values, but the leasing market has been somewhat insulated by smaller tenants renewing their spaces.

Larger tenants are making a flight to the best buildings, which is affecting even the upper end of the market, as buildings traditionally considered A-grade are now in some cases ageing and struggling to keep tenants.

The shift by the telco could be a blow to the North Sydney building’s Singapore owner, Suntec REIT, which had weighed up the prospect of selling last year.