Chinese-backed developer Aqualand is set to demolish SAP’s old headquarters at 168 Walker Street in North Sydney to make way for a $1 billion-plus residential project.
Aqualand, which bought the Walker Street site in 2015 for $157.5 million from investment and advisory group Anton Capital, lodged a development application for a mixed-use development comprising 441 high-end apartments in 2016.
The existing building, which was home to technology company SAP, became vacant in November 2019.
SAP will now shift its local headquarters to Winten Property Group’s 1 Denison Street office tower in North Sydney, taking 17,000 square metres.
Aqualand, a subsidiary of Shanghai-based developer Shenglong, has its own building unit allowing for flexibility on the timing of works and its designs.
The Sydney-based developer will oversee both the demolition of the existing commercial tower and construction of its new Woods Bagot-designed residential project.
The commercial to residential play comes as Sydney's CBD office vacancy rate falls to 3.9 per cent as tenants to search for new space elsewhere in the city.
Office towers in North Sydney are also in hot demand given the limited supply of office space caused by compulsory acquisitions for the new metro station Victoria Cross.
Despite the slow down in mid-range apartment sales across Sydney, Aqualand is confident its luxury residential product will sell.
“It’s clear we are seeing resurgence of discerning buyers looking for high quality product in distinctive locations, and our project will be simply the best North Sydney has to offer,” Aqualand chief executive John Carfi told The Urban Developer.
“We have consistently achieved record prices at our Blue Lavender Bay project and this has continued to improve over the last several months.
“Our upcoming North Sydney project will bring a level of living to North Sydney that has yet to be offered.”
Aqualand's 168 Walker Street won't be the first substantial office-to-residential conversion in the area.
Chinese-backed Yuhu Group is undertaking a $200 million 283-apartment project at 221 Miller Street while Greenland's 211-apartment development at 225 Pacific Highway gained notoriety in 2014 after selling out.
Australia's biggest residential housing developer Stockland has looked to firm up its commercial pipeline, acquiring 118 Walker Street and the neighbouring 122 Walker Street for a combined $121 million.
The amalgamated site could have the potential to accommodate up to 60,000sq m of prime office space.