The Milligan Group have successfully pre-sold their Pyrmont development project to Suntec REIT in a $297M deal.
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The project, named Workshop, is an eight-level office building with a net leasable area of 18,888 square metres.
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Earlier this year, Milligan secured French multinational advertising and public relations firm Publicis Groupe on a 10-year lease for 10,100 sqm, at a net annual rent of $770 per square metre.
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Hong Kong-based co-working operator Campfire also among the tenants pre-committing to the building, which is 91% leased.
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The building is targeting a 6-star Green Star and 5-star NABERS Energy rating and will contain an on-site food and beverage facility, gym, childcare centre, and first-class end-of-trip facilities.
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Construction of the project, which is being supported by Stamford Capital and Quintet Projects, is scheduled for completion at the end of December 2019.
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The site was controlled by Lend Lease from 1996 as part of the Jacksons Landing redevelopment precinct. Lend Lease obtained a development approval for the site in 2007 and commenced early works in 2012. Works however stopped and the site was then acquired by Singapore-based Net Venture Properties One (Australia) Pty Ltd for $26.8 million in 2013.
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An amending DA was lodged in 2017, by 21 Harris Street Pty Ltd and approved in December 2017. The site was subsequently sold to 21 Harris St in October 2018 for $61M. 21 Harris Street Pty Ltd is a company jointly owned by James Milligan and QPSC Pty Ltd, which is ultimately controlled by Paul Batchelor and Michelene Hart, Frank Tearle and Justin Epstein.
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According to the Development Application, will spend a further $66M in construction works, excluding consultants fees, interest, contributions, incentives etc.
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Suntec REIT is managed by ARA Trust Management, a subsidiary of Warburg Pincus-backed ARA Asset Management. Under the terms of a put & call agreement, Suntech will pay Milligan A$119.0m for the property on completion of the project and a further A$178.0 million for fees for development services.
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Suntec REIT has entered into the Development Agreement with 21 Harris Street Developments Pty Ltd, which includes the payment of a security deposit ofA$14.85 million, which will be refunded upon payment of fee for development services of A$178.0 million after Practical Completion.
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Milligan are obligated to provide a rental guarantee for three years following completion at a 5.5 percent capitalisation rate based on market rents.