Docklands office sells for record $1.2b

The office will be separated from Collins Street with a sky park.

In Australia’s biggest office sale this year, the National Pension Service of Korea (NPS) is paying $1.2 billion for 699 Collins Street, which is under construction in Melbourne’s Docklands.

Medibank recently committed to 17,500 square metres of the tower.

The vendor, Lendlease, only pre-committed an anchor tenant to the 70,000 square metre Premium grade building last month.

The seller will be responsible for leasing the balance of the space.

Upon completion in 2024, its Funds Management arm will manage it.

NPS, the world’s third largest pension fund, controls assets worth $A600b.

Two days ago, we reported Mirvac and M&G spent $575 million on a half-share of Sydney’s EY Centre at 200 George St.

699 Collins Street, Melbourne

Rising 34 levels and 165 metres – making it Docklands’ tallest tower – about 17,500 sqm of the office, also known as Melbourne Quarter Tower and 693 Collins St, is leased to Medibank.

The property includes an additional 3000 sqm wellness hub with a childcare centre and allied health services, 2500 sqm of retail and an open-to-the-public sky park.

The building is the third and final commercial asset earmarked for Lendlease’s $3b Melbourne Quarter, which also contains 40 shops and 1500 apartments in two towers.

A laneway connecting Collins and Flinders streets forms part of the master-planned project too (story continues below).

“Melbourne Quarter is the culmination of NPS’s endeavour in executing its build-to-core investment strategy to acquire premium quality commercial assets with high sustainability features,” NPS head of Real Estate Investments, Scott Kim, said.

“The COVID-19 pandemic is accelerating flight to quality trends in the office sector and this asset fits our strategy to invest in the highest quality buildings in desired locations with strong tenant demands,” according to the executive.

“We are delighted to partner with Lendlease on this landmark transaction and look forward to continuing to deepen NPS’s investment exposure to real estate in Australia”.

Lendlease chief executive officer, Property, Australia, Kylie Rampa, added NPS is a valued client of Lendlease Funds Management.

“Melbourne Quarter is one of the largest mixed-use urban regeneration developments the city has seen,” the executive said.

“It connects people and places with transport and technology in a green, amenity-rich, urban environment to improve wellness, productivity and social connection.

“This is what the best companies around the world want for their people and NPS’s investment and Medibank’s commitment shows the continuing attractiveness of Melbourne Quarter to progressive corporates,” Ms Rampa said.

“We’re looking forward to working closely with Medibank to bring their workplace vision to life.”

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.