Sydney Commercial Tower to be Demolished to Make Way for Residences

The proposed mixed-use development would comprise 441 high-end apartments.

17 February 2020 | Sydney, Australia

Chinese-backed developer Aqualand is set to demolish SAP’s old headquarters at 168 Walker Street in North Sydney in order to make way for a AUS$1 billion-plus (US$670 million) residential project.

Aqualand, which bought the Walker Street site in 2015 for AUS$157.5 million (US$106 million) from investment and advisory group Anton Capital, lodged a development application for a mixed-use development comprising 441 high-end apartments in 2016.

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The existing 20-story building, which was home to technology company SAP and was originally built in 1973, became vacant in November 2019.

SAP will now shift its local headquarters to Winten Property Group’s 1 Denison Street office tower in North Sydney, taking 17,000 square meters.

Aqualand, a subsidiary of Shanghai-based developer Shenglong, has its own building unit allowing for flexibility on the timing of works and its designs.

The Sydney-based developer will oversee both the demolition of the existing commercial tower and the construction of its new Woods Bagot-designed residential project.

The commercial-to-residential play comes as Sydney's CBD office vacancy rate falls to 3.9 percent as tenants to search for new space elsewhere in the city.

Office towers in North Sydney are also in hot demand given the limited supply of office space caused by compulsory acquisitions for the new Victoria Cross Metro station. Despite the slowdown in mid-range apartment sales across Sydney, Aqualand is confident its luxury residential product will sell.

“Our upcoming North Sydney project will bring a level of living to North Sydney that has yet to be offered,” said Aqualand chief executive John Carfi

The Aqualand project won't be the first substantial office-to-residential conversion in the area. Chinese-backed Yuhu Group is undertaking a AUS$200 million (US$130 million), 283-apartment project at 221 Miller Street, dubbed "The Miller," while Greenland's 211-apartment development at 225 Pacific Highway gained notoriety in 2014 after selling out.

Also along Walker Street, residential housing developer Stockland has looked to firm up its commercial pipeline, acquiring 118 Walker Street and the neighboring 122 Walker Street for a combined AUS$121 million (US$81 million). The amalgamated site could have the potential to accommodate up to 60,000 square meters of office space.

For more on this story, go to The Urban Developer.