Mitsui Fudosan Buys Two-Thirds Stake in $1.3B Sydney Office Project From Mirvac

Mitsui Fudosan has acquired a 66 percent stake in a Mirvac office project near the Sydney harbourfront with an estimated end value of A$2 billion ($1.3 billion).

Japan’s largest developer will co-own 55 Pitt Street with ASX-listed property giant Mirvac, which will develop and construct the 55-storey building and provide leasing, investment and property management for the finished asset, according to a Friday announcement.

With frontages to Pitt, Underwood and Dalley streets in the Circular Quay precinct, the tower is planned to provide 62,000 square metres (667,362 square feet) of office and retail space. Completion is expected in 2026.

“The project will be delivered as a joint venture, with the co-owners retaining leasing risk on the development,” Mirvac said.

Melbourne Sale Confirmed

In the same announcement, Mirvac said it had exchanged contracts and received a deposit for the sale of 367 Collins Street in Melbourne, with the deal expected to close in July.

Hong Kong-based private equity firm PAG is paying A$340 million for the 34-storey office tower in Melbourne’s central business district, the Australian Financial Review reported last week.

The moves come after Singapore-listed Keppel REIT announced earlier this year that it would pay A$363.8 million for a 50 percent stake in Mirvac’s tower at 255 George Street in central Sydney. The remaining stake in the 29-storey office building is held by Mirvac’s first Wholesale Office Fund.

The transaction is the latest in a series of 50:50 investments by Keppel REIT in Mirvac assets, with the trust also holding a half stake in 8 Chifley Square, a 30-storey commercial building about 10 minutes’ walk from 255 George Street, and in the 33-level David Malcolm Justice Centre commercial tower in Perth’s city centre.

Japan Outbound Carries On

Mitsui Fudosan’s buy continues a trend after Japanese investors more than doubled their overseas acquisitions of real estate in Asia Pacific last year with spending of $2.24 billion, according to MSCI Real Assets. The top target was Australia, where Japanese investors acquired $1.85 billion in income-earning assets in 2023 — up from a $200 million yearly average over the past decade.

Last October, Mitsubishi Estate teamed up with Sydney-based investment manager AsheMorgan to buy the 60 Margaret Street commercial complex in the New South Wales capital from Blackstone and Mirvac for A$777 million ($494 million).

That deal came after Mitsubishi Estate backed a A$1.8 billion Mirvac build-to-rent venture last June.