333 Kent Street to be developed following joint venture agreement

Construction on a new commercial tower at 333 Kent Street in Sydney’s CBD is set to start next year following a joint venture agreement to deliver the project.

The property’s majority owner Glory Star has entered into a joint venture partnership with Sydney- based property developer, Addenbrooke, which has partnered with Phoenix Property Investors (“PPI”), to purchase the stake in the development.

The joint venture partnership transaction was brokered by Scott Timbrell, Jessen O’Sullivan and Andrew Harford of Knight Frank, who handled the strategic process on behalf of Glory Star.

The completed project, designed by renowned architectural firm WMK, will deliver a 14-storey commercial building with 14,242sq m of A-grade net lettable space between the existing heritage façade of the property and a new additional structure.

It will involve the redevelopment of an existing 1980s B-grade office building with circa 10,000sq m of gross floor area to deliver a brand new A-grade office development in the heart of the evolving commercial western corridor in the CBD.

The property at 333 Kent Street was originally planned to be developed by Glory Star in a fund managed by iProsperity after it purchased the property in 2016 and subsequently gained concept approval for a mixed-use hotel development on the site.

But iProsperity was removed as the fund manager after it went into administration in July 2020, with Glory Star Properties, the majority owner of the Kent Street site, then moving ahead with delivering the new development application for a 14-storey commercial tower.

The project will now be delivered by the joint venture partnership, with construction set to begin in the second quarter of 2022, with an expected practical completion date of late 2023 or early 2024.

A formal builder tender process will be conducted early next year to appoint the preferred contactor and a leasing campaign will commence shortly.

To address post-COVID demand for office space, the design for 333 Kent Street has put specific emphasis on accommodating new office trends with smart systems and touchless technology, unique external breakout spaces, market-leading end-of-trip facilities and ground floor food and beverage activation.

Floorplates will range in size from 882sq m to 1,170sq m, and will offer tenants views over Darling Harbour and the choice of creative or traditional style office fitouts appealing to a wide range of occupants.

Moni Xinye An on behalf of Glory Star, which is majority owned by Australian Chinese developer Super Ocean Group founded by Mr Li Pei Ye, said: “After looking for some time in the market for a suitable partner to deliver the project with, we are very happy with the result.

“Addenbrooke will bring good synergy to the existing team with their development track record.”

Toby O’Neil from Addenbrooke said: “We are excited to have completed this transaction with our team and to be a part of this distinctive commercial project.”

“We have always been strong believers in this precinct and believe the timing of this development is perfect given our position in the current market cycle and the return to the CBD for office users.”

Trent Winduss, Head of PPI Australia, said: “We are delighted to partner with Addenbrooke to acquire this stake.

“We consider that well-located, distinctive, boutique office projects such as 333 Kent Street will remain an attractive proposition for both tenants and property investors and we look forward to delivering a world-class project which will be a prominent addition to the Sydney CBD’s western corridor precinct.”

Jessen O’Sullivan of Knight Frank said the joint venture partnership was brokered off market in a very timely fashion.

“It was a fairly quick process involving two like-minded parties coming together and sharing the same vision,” he said.

“This deal, and the pending development, is a real vote of confidence in Sydney CBD, which has seen a resurgence in activity since COVID-19 restrictions have recently eased in New South Wales, with many people coming back into offices.

“Rather than seeing a move away from the CBD from tenants, we are actually seeing the opposite at the moment, but there is flight to quality, with office workers wanting COVID-safe A-grade buildings, but also to be close to amenity, including restaurants, cafes, shops and bars for after-work drinks as they enjoy socialising again.

“This development at 333 Kent Street will tick all the boxes.”