The world’s tallest hybrid timber tower could still rise over Sydney’s Pitt and Hunter Streets, with CBUS Property last week securing a 50% stake in the 40,000-square-metre office project. The deal, reported by the Australian Financial Review (AFR) last week, comes after a non-binding agreement, believed to be worth $685 million, between the developers (Milligan Group) and Lendlease fell through last year in the latest blow for one of the world’s most ambitious low-carbon office projects.
Wood Central previously reported that Milligan had been busy accumulating 70 individual titles to create a supersite across a new metro station in the heart of the CBD, allowing scope for the landmark skyscraper. However, the plan brought considerable financial obligations, backed by private credit lenders, including Merricks Capital, which is owed more than $500 million (according to AFR reports), and a group of approximately 60 investors who provided vendor financing when they sold their sites to Milligan.
And as Milligan struggled to move forward with the project or bring on a capital partner, its finances became stretched. Doubts also arose over the estimated end value of the project, which was $1.8 billion, as planning delays and high construction costs hindered progress.
However, most of those roadblocks have now been addressed with the $105 billion CBus Property taking a 50% stake in the project. “This acquisition is a strong reflection of our strategy to secure well-located commercial assets that respond to future customer demand,” Cbus Property’s chief executive, Adrian Pozzo, said in a statement on Wednesday. “It supports our portfolio reweighting to Sydney and continues our track record of delivering high-quality developments that capture market uplift through timing and delivery excellence.”
“Halo is widely recognised as an ambitious project that has the potential to redefine sustainability, design and workplace experience in Australia,” Milligan Group’s managing director, James Milligan, said. “Cbus Property’s involvement will ensure the project benefits from the company’s proven track record in delivering complex, large-scale developments in partnership with leading industry participants.”
Will ‘Halo’ command sky-high premiums?
Last year, Wood Central reported that the new tower, dubbed “Halo,” was winning traction among corporate tenants keen to shift into next-generation towers with top environmental credentials. It comes amid a push by corporate tenants demanding greener, cleaner, and more sustainable buildings, fueling a new wave of green buildings.
Designed by Bates Smart Architects, it will be one of the world’s most sustainable buildings. It will have Australia’s largest facade PV arrays, use low-carbon concrete, cross-laminated timbers, and glulam, be all-electric, and have net-zero emissions. It also targets a 6-Star Green Star and 6-Star NABERs rating. In addition, it will feature a 4,000 sqm health and wellness centre, 3,000 sqm restaurant and bar space, and more than 40,000 square metres of A-grade office space.
The new building will tower over Sydney’s skyline.
In July 2022, Milligan Group received approval to rezone the 2,000-square-metre site at the junction of Hunter and Pitt Streets over the new Hunter Street Station as part of Sydney’s new $6.5b Sydney Metro West.
Australia now leads the world in the push to build skyscrapers out of timber, with “Halo” just a hop, skip and jump from Atlassin’s new 39-storey timber hybrid tower, which is now “out of the ground.” Whilst Melbourne-based developer Grange Developments is currently working through a 50-storey timber-hybrid residential development in Perth.
The site spans 15-25 Hunter St and 105-107 Pitt St and is in Sydney’s core precinct, dominated by the financial, legal, property, and tech sectors. For its measure, Milligan has described the project as “a legacy building for Central Sydney in the form of a world-class commercial office tower in the commercial core of the CBD.”
