An eyesore construction site in Sydney’s famous harbour gateway that went up in flames four years ago and has sat empty since will be turned into an upmarket apartment tower and the country’s first Waldorf Astoria hotel in a $3 billion venture.
Development giant Lendlease and joint venture partner Mitsubishi Estate Asia have resolved the future of Circular Quay’s last development puzzle, striking an $800 million deal to buy a 4000 square metre block at 1 Alfred Street, empty since 2017.
The hoarded-up crater in the middle of the waterfront area was once owned by Huang Xiangmo, a suspected Chinese Communist Party influence agent who made political donations to the NSW Labor and Country Labor Party, and who has since left the country.
In 2018, a fire broke out on the site’s scaffolding, billowing smoke across the city and sparking an emergency.
Xiangmo’s company Yuhu passed control of the vacant block to another Chinese entity, AWH Investment Group, which has now sold its stake to the Lendlease joint venture. Another Chinese-based developer, Wanda group, had purchased the beleaguered property in 2014 and then spent hundreds of thousands of dollars demolishing an iconic 1960s office tower that occupied the site.
The building eyesore hasn’t stopped Circular Quay’s rapid development. The area is now home to three new skyscraper office towers, including the recently opened $2 billion Quay Quarter Tower at its eastern end and the under-construction Salesforce tower.
As part of its revamp - it’s a particularly important gateway for Sydney - the NSW government allocated $216 million in the June budget to upgrade surrounding public space, ferry terminals and the Cahill Expressway.
Lendlease Australia’s managing director of development Tom Mackellar said One Circular Quay will elevate “Sydney’s real estate market on the global stage” and become one of the world’s most desired addresses to live and stay.
“With uninterrupted views of the Sydney Harbour Bridge and Sydney Opera House, a development of this standard, in this location, is an incredible opportunity, and we look forward to bringing this iconic development to market,” Mackellar said.
The site has plans for a 59-level luxury residential tower designed by the late Australian architect Kerry Hill. Under the previous owners’ proposals, the penthouse was said to be worth around $100 million. A second tower, designed by Kengo Kuma & Associates, will be developed into a 220-room luxury Waldorf Astoria hotel, managed by the Hilton group as part of its luxury brand portfolio.
Mitsubishi Estate Asia’s Yuzo Nishiyama said the group was “truly excited to be a part of such an iconic project for Sydney and [we] look forward to expanding our relationship with Lendlease as we work together to deliver One Circular Quay.”
Under the current joint venture, Mitsubishi Estate holds a 19.9 per cent interest. Subject to the satisfaction of certain conditions, this will increase to 66.7 per cent and Lendlease’s ownership will reduce to 33.3 per cent.
Mitsubishi Estate is also a partner on Lendlease’s One Sydney Harbour and Sydney Place residential developments at Barangaroo and its Melbourne Quarter residential East Tower.