Sydney's iconic Circular Quay precinct is to get a facelift with the addition of a five-star hotel and upmarket apartments, following the sale of the Gold Fields House at 1 Alfred Street to the Chinese Dalian Wanda Group for $415 million.
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The sale, foreshadowed in BusinessDay last month, is one of the largest along the landmark strip, which is earmarked for several redevelopment projects that will start this year.
Global investment group Blackstone sold the site, which it acquired when it took over Valad Property Group in 2011.
The sale was negotiated through CBRE and JLL.
Blackstone has been reviewing all possibilities for the well-known 1960s-vintage property, including redevelopment into apartments.
Blackstone's head of real estate Asia, Chris Heady, confirmed the binding agreement had been signed with Dalian Wanda, saying Gold Fields House has been successfully repositioned and planning approvals obtained to redevelop the office building into one of Sydney's "premium residential developments".
"Blackstone has built a diverse real estate portfolio in Australia of over $3.5 billion of assets and we are committed to pursuing acquisitions and disposals that benefit our investors and joint venture partners," Mr Heady said in a statement.
A spokesperson from Wanda said the group recognised the "iconic location", and intended to create a mixed-use development including a five-star hotel, luxury residential properties and retail outlets.
"We look forward to creating a new Sydney landmark," a Wanda group statement said.
Confirmation of the sale, which will be completed in about March, ended a busy 2014 for commercial property sales.
Simon Hemphill, NSW research director at Savills, said sales activity in the 12 months to December 2014 totalled $4.7 billion, almost double the amount recorded in the 12 months before.
"Foreign investors were responsible for 45 per cent of these sales, totalling more than $2.1 billion," Mr Hemphill said.
"The influence of overseas investors in the market has undoubtedly had a profound effect in Sydney CBD, as evidenced by the high levels of transactions over the last 12 months," he said.
Once redeveloped, the Gold Fields House site will bookend Circular Quay with AMP's $1 billion revamp of its 50 Bridge Street office tower and laneway, and the former Coca-Cola building opposite in Macquarie Street, which is also being developed into apartments.
Lend Lease has also lodged a draft planning proposal with the City of Sydney for a commercial tower at Circular Quay at 174-176 George Street, 182 George Street and 33-35 Pitt Street.
This could include the Jacksons on George bar, which could be turned into apartments or a hotel.
DEXUS Property is also planning to upgrade and redevelop the retail sector of its Gateway building at Circular Quay and underneath Grosvenor Place in the coming years.
The new projects will also benefit in the longer term from the light rail project along George Street, which will turn it into a pedestrian strip, and through the main part of the city.
There are also plans to link a walkway around Circular Quay to Barangaroo South and up to the new developments of hotels, apartments and the new convention centre at Darling Harbour.
