Allianz, NPS to buy 50% stake in landmark office building in Sydney

Allianz, NPS to buy 50% stake in landmark office building in Sydney
Commonwealth Bank Place (Darling Quarter) office building in Sydney Copyright: Landlease

AREAP Core I fund, managed by Allianz Real Estate, has agreed to acquire a 50% stake in Commonwealth Bank Place (Darling Quarter) office building in Sydney for USD 445 million.

The fund is a USD 2.3 billion investment platform in the form of a Singapore domiciled, close-end fund where National Pension Service of Korea(NPS) and Allianz are 50:50 investors. 

The asset is strategically located on Harbour Street in Sydney, with the entire office component leased to Commonwealth Bank of Australia with WALE for more than 12 years.

Completed in 2012, Darling Quarter comprises total net lettable area of around 61,000 square meters across two towers of campus style premium-grade office space alongside retail shops on the ground level.

The asset has a 99.7% committed occupancy rate and was awarded 6-Star Green Star Design and As-Built certification and is currently operating with 6-Star NABERS Energy and 6-Star Water ratings. 

The transaction, subject to regulatory approvals, is expected to close in Q1’2022. 

Allianz said this transaction is in line with AREAP Core I fund’s strategy to build a diversified portfolio of high-quality assets across Asia-Pacific and comes on the back of the acquisition of a 50% stake in OUE Bayfront, Singapore last year.

“The pandemic has re-emphasized the importance of micro location, city density, asset quality and ESG when investing in an office asset,” said Danny Phuan, Asia-Pacific Head of Acquisitions for Allianz Real Estate, “Sydney is one of the most liveable cities in the world and the long-term outlook for the Sydney office market remains favourable, supported by robust economic fundamentals, an attractive labour market and strong infrastructure investments”.

“On behalf of NPS and Allianz, we are very happy to be investing in this landmark office building in Sydney, providing long-term value and stable cash flow. AREAP Core I is now 82% committed and this asset provides attractive diversification to the portfolio” said Rushabh Desai, Asia Pacific CEO for Allianz Real Estate. “We are also excited to establish a partnership with a best-in-class company like Lendlease”.