Impact Investment Group has secured an option to invest $190 million in one of the most recent stages of Sekisui House and Frasers Property’s uber-green Central Park development in Sydney.
The put and call options aim to secure two key parts of the $290 million twin tower DUO development, the six-level 5431 square metre 100 Broadway commercial office space, and the 297-room Four Points by Sheraton Sydney hotel.
The balance of the DUO development includes a childcare centre, ground floor retail plaza and 313 residential apartments.
IIG has established separate investment syndicates for the hospitality and commercial office properties, with the transaction to exercise the options due to be finalised when the buildings are complete in mid-2018.
Green leases part of the deal
The leasing campaign is already underway for the commercial space. CBRE has been appointed to handle the campaign, which is “international in scope”, an IIG spokesman said.
The terms for tenants will be negotiated on a “case-by-case” basis, but broadly will include green leasing protocols IIG has been developing in-house, he said.
The protocols involve a comprehensive set of sustainability and impact objectives that aim to benefit the fund, the tenant, stakeholders, the wider community and the environment.
He said the aim was to also roll them out across all the fund’s commercial property assets.
Designed by Foster + Partners in collaboration with Architectus and being constructed by Brookfield Multiplex, DUO is aiming to achieve 5 Star Green Star as a minimum.
It will also share in the low-carbon Central Park district energy system comprising thermal generation and trigeneration for heating, cooling and hot water, and the precinct-wide recycled water system.
“We couldn’t be more proud of our first foray into the Sydney market with these properties,” IIG chief executive Chris Lock said.
“We were waiting to find a building designed to the highest standards in sustainability. We found this in spades in the Central Park precinct.”
Mr Lock said it was crucial to the fund that recycled materials and environmentally certified products were being prioritised in the construction of the project.
The fund was also attracted to the thermal and acoustic features of the design and measures for promoting occupant wellbeing, he said.
Once tenants move into the commercial space and the hotel also commences operations, Mr Lock said the fund would monitor energy use and work with occupants to reduce consumption.
This should deliver valuable cost savings, he said.
The fund has had a busy start to 2017, on top of announcing its investment in 5 King St, a planned tall timber commercial office building being jointly developed with Lendlease in Brisbane, it has sealed a deal with global co-working start-up WeWork to occupy all nine levels and the rooftop of its 401 Collins St property in Melbourne.
The property is currently occupied by Roy Morgan Research, which is due to vacate its tenancy later this year.
IIG plans a substantial upgrade of the property prior to WeWork bumping in, including energy efficiency improvements to HVAC, building management system and electrical services.