Leighton's 177 Pacific Highway, North Sydney $400m office high-rise

Leighton Properties will build its first new commercial building in six years at 177 Pacific Highway, North Sydney, which it says will become one of Sydney’s most significant projects.

The $400 million high rise will redefine the CBD skyline and feature 40,000 square metres of A-grade commercial space across 30 levels. Completion is scheduled in the first half of 2016.

Leighton Properties has agreed to terms with the vendor, Winten Property Group, over the project.

“The development fits with our core competency of CBD commercial development and our strategy to leverage the Leighton brand, certainty of delivery and credit rating, together with our space occupancy needs to attract investment partners to our projects,’’ Mark Gray, managing director of Leighton Properties, says.

‘’The project will be underwritten by Leighton, which will take a head lease over 76% of the office space. The remaining 10,000 square metres in the tower’s sky rise will be available to other corporate to meet demand in North Sydney, a market that is experiencing record low vacancy rates.

“We have developed a number of the prime North Sydney towers in the past and we feel the area is worthy of a new development of this kind, particularly given North Sydney has a vacancy rate of 2.8% in the A-grade commercial sector.’’

Architects Bates Smart have designed the building with state of the art design elements, large floor plates and sweeping harbour views. It will have substantial green credentials and is designed to target a 5 Star Green Star – Office Design v3 and a 5 Star NABERS Energy rating.

The Leighton Group already occupies 40,000 square metres of office space in Sydney, both corporate and project, across 11 buildings of differing quality, density, fitout and age, according to CEO Hamish Tyrwhitt.

‘’The potential for a high performance workplace that consolidates our corporate and operational office spaces with shared facilities and high amenity will drive a more efficient and collegiate working environment that embodies the company’s values of discipline, integrity, safety and success.

“We aim to be renowned for excellence, delivering through our operating brands and the empowerment of our people. This project will embody this vision creating a working environment that will inspire and connect our staff in the pursuit of excellence.”

Jones Lang LaSalle and CBRE are agents for the sale with a national and international expressions of interest campaign closing on September 19.

“Jones Lang LaSalle research indicates that there is a basket of only 48 assets nationally with investment characteristics similar to 177 Pacific Highway, North Sydney,’’ Paul Noonan, head of sales and investments (NSW) at Jones Lang LaSalle, says.

‘’A high proportion of these assets are jointly owned and assets in this cohort are tightly held, making this a truly rare opportunity. We expect this will result in strong competition from domestic and international investors."

Josh Cullen, national director capital markets at CBRE, says he expects ‘’significant interest for core product, such as 177 Pacific Highway, from both onshore and offshore groups.

‘’There is still very strong capital chasing limited core CBD opportunities within the Australian market.”