Lendlease Completes First of Two North Sydney Projects

Lendlease has completed construction of an A-grade boutique office building in North Sydney, the NSW capital’s fast-growing second CBD.  

The 10-level tower on the corner of Blue and William streets has been built with a focus on “wellness and tenant experience”, targeting a 5.5 star NABERS Energy Rating and 5 star Green Star Rating. 

Singapore’s Keppel REIT purchased the development in December last year through the company’s funds unit for $327.7 million. The project was offloaded by private developer Thirdi soon after it broke ground in November with builder FDC.

Thirdi, alongside private equity firm Phoenix Property Investors, amalgamated the 2300sq m development site at 2-4 Blue Street and 1-5 William Street in late 2019 before putting forward plans for the office development. The project replaces 40 residential apartments across five buildings.

Lendlease head of commercial development Lisa Gordon said that post-pandemic many businesses were actively looking for the “next generation” in workplaces.

“North Sydney is on a path to complete transformation, with new commercial developments committing to the future vision for the area,” Gordon said.

“We’re increasingly finding that prospective tenants are seeking out high quality, flexible and wellness conscious office spaces in prime locations.”

It joins several other new office developments in the suburb—the Nine-anchored tower at 1 Denison Street by Winten Property Group and Dexus’ new 100 Mount Street block. Other groups such as Mirvac have also used the strata renewal strategy to access commercial sites in North Sydney. 

▲ Lendlease will manage the building, expanding its exposure to the area and bolstering its commercial pipeline in North Sydney. Image: Woods Bagot

Lendlease’s project, designed by Woods Bagot, will offer 15,000sq m of floor space featuring floor-to-ceiling windows and will have harbour views. It also includes a landscaped rooftop garden and open spaces, a cafe and end-of-trip facilities.

Nearby, Lendlease will now move ahead on its $1.2-billion commercial and retail precinct that forms part of the Sydney Metro integrated station development with construction to start imminently.

Rising above North Sydney’s new metro station, the 42-storey Victoria Cross Tower will be one of the city’s most sustainable and well-connected workplaces that will flow into a retail-activated laneway with 20 tenancies planned. Completion is billed for 2024.

Like many cities, the emerging second CBD suffered during the pandemic. As of July, North Sydney’s total vacancy was 16.4 per cent, down marginally from 16.6 per cent at the turn of the year, according to the latest figures from the Property Council of Australia. Comparatively, Sydney’s CBD vacancy rate has moved up into double digits at 10.1 per cent.

Across North Sydney there is currently close to $11 billion worth of new projects on the drawing board or under construction.

Active Super has pulled together a 3550sq m site at Berry Street that could host a 66,000sq m office tower, local developer Podia has plans for a 12-storey mixed-use tower on its 45 McLaren Street site and fund manager Pro-invest plans a 40,000sq m office tower on the 100 Walker Street site it acquired last year.

Stockland also has plans for a $500-million, 53-level commercial building—which would be the suburb’s tallest if realised—on a 2300sq m amalgamated site at 118-122 Walker Street, acquired for $121 million in 2019.

At the corner of McLaren and Walker streets developer Aqualand is advancing on a $1-billion mixed-use tower across a 7500sq m site. The project, dubbed Aura, will be home to 386 high-end apartments, a retail and dining precinct, and commercial spaces.

Meanwhile Billbergia’s 48-storey mixed-use hotel and commercial development at 88 Walker Street is half-way out of the ground and due for completion in 2023.