Canada’s Oxford Properties and its Australian operating partner Investa have welcomed Japanese property giant Mitsubishi Estate into a joint venture to develop a premium office building in downtown Sydney.
The 39-storey office building and retail precinct, known as Parkline Place, will integrate with the future Pitt Street metro station and feature 47,800 square metres (514,515 square feet) of office space and a further 1,290 square metres of retail.
Oxford, the global property investment wing of the Ontario Municipal Employees Retirement System, and Sydney-based fund manager Investa received development approval for the Parkline project in March, with completion scheduled for the first quarter of 2024. Under the terms of the JV, Mitsubishi Estate will acquire a 25 percent interest in Parkline Place and Oxford will retain a 75 percent interest, Oxford Properties said Tuesday in a release.
“Partnership is in Oxford’s DNA, so we’re proud to be working alongside Mitsubishi Estate to deliver a project that we believe will redefine the modern workplace in Australia,” said Alec Harper, Oxford’s country head. “Mitsubishi Estate’s investment in the project is another demonstration of the strong appetite among global institutional capital for high-quality office product that Oxford is seeing play out in key gateway markets around the world.”
Work Starts Now
The JV partners did not disclose the amount of their investment in Parkline Place. Local construction firm CPB Contractors on Tuesday confirmed its role as the builder of the project and said it anticipated revenue of A$368 million ($274 million) from the job, which is to start work immediately.
CPB, a unit of civil engineering giant CIMIC Group, is also constructing Pitt Street station under a A$463 million contract and an Oxford-developed build-to-rent building above the station for A$150 million.
Designed by architects Foster & Partners, Parkline Place takes its name from the nearby parklands in Sydney’s central business district. The development at the intersection of Pitt and Park streets promises “exceptional views” of Hyde Park and the Sydney Harbour, plus smart-building features such as a “digital twin” building model for real-time operations insight and management.
The project is targeting a minimum Gold certification for WELL Rating Core and Shell, a sustainability standard.
“City-defining projects such as Parkline Place bring great minds together,” said Nellie O’Keeffe, Oxford’s Pitt Street project director. “We are confident in the Sydney office market and believe the project’s exceptional location, integration with the new Pitt Street metro station, leading sustainability and technology features and world-class delivery team will underpin the successful delivery of the development.”
Mitsubishi Estate, one of Japan’s biggest developers, has stayed active in overseas investment this year, including in Sydney.
In mid-2021, the group set up a joint venture with Australia’s Lendlease to develop the Residences Two, a second residential tower at the One Sydney Harbour project, with Mitsubishi Estate acquiring a 25 percent interest in the tower to match its 25 percent interest in Residences One.
Earlier this year, Investa joined a different Canadian investor, Toronto-based financial services firm Manulife, in a 50: 50 partnership to acquire an under-construction Sydney commercial building for A$800 million. The 28-storey tower at 39 Martin Place is being developed by Australian banking giant Macquarie.
In another key office deal in the city, Singapore-listed AIMS APAC REIT in September agreed to purchase retailer Woolworths’ Sydney headquarters for A$463.3 million.