The Milligan Group have successfully pre-sold their Pyrmont development project to Suntec REIT in a $297M deal.
The project, named Workshop, is an eight-level office building with a net leasable area of 18,888 square metres.
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.
Hong Kong-based co-working operator Campfire also among the tenants pre-committing to the building, which is 91% leased.
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.
Construction of the project, which is being supported by Stamford Capital and Quintet Projects, is scheduled for completion at the end of December 2019.
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.
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.
According to the Development Application, will spend a further $66M in construction works, excluding consultants fees, interest, contributions, incentives etc.
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.
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.
Milligan are obligated to provide a rental guarantee for three years following completion at a 5.5 percent capitalisation rate based on market rents.
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