Allianz, NPSK spend $630m on Darling Harbour office

Darling Quarter contains two campus style offices overlooking Tumbalong Park.

Allianz Real Estate Investors and the National Pension Service of Korea have purchased a half stake in the campus style Darling Quarter complex from the Abu Dhabi Investment Authority.

The price – US$445 million ($630m) – reflects a sub four per cent passing yield, which the marketing agents say is a record low for a major Australian office.

The balance is owned by a fund managed by Lendlease which coincidentally offered it for sale at the same time as the ADIA, in the third quarter of last year, but ended up retaining.

Allianz and the NPSK will hold their equal shares via the Singapore-based closed ended trust AREAP Core 1.

Last year, NPSK paid Lendlease $1.2 billion for a 70,000 sqm Docklands office, now under construction.

Darling Quarter

Completed 10 years ago and also known as Commonwealth Bank Place, Darling Quarter at 1-25 Harbour Street, Darling Harbour, contains 61,000 square metres of Premium grade area across two campus style buildings.

Commonwealth Bank of Australia is the sole tenant on a lease expiring in about 13 years (story continues below).

“The sale process for Darling Quarter was exceptionally competitive,” CBRE’s Flint Davidson, who represented ADIA with Stuart McCann and James Parry, said.

“Darling Quarter represents what core capital is seeking across income security and growth, outstanding ESG credentials and the ability to gain exposure to the exceptionally tightly held premium grade office sector in Sydney,” he added.

“The Australian office real estate market remains highly attractive in a regional and global context, given the…attractive returns available and relative strength of the economy,” according to the executive.

“There has been plenty of commentary around the impact of the pandemic on the office sector and this result – representing a record yield for the Australian office market – reinforces investors’ belief in the future of the sector”.

Mr McCann said international capital is flowing into the country at significant, record levels.

“This transaction is a great demonstration of this trend and follows 2021 when we saw the highest level of foreign investment into the Australian real estate market on record, with global capital acquiring $16.6b of assets across all sectors”.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of