Allianz, NPS Deal for Half Stake in Darling Quarter

Allianz Real Estate and the National Pension Service of Korea will soon own half of the marquee Commonwealth Bank Place in Sydney’s Darling Harbour.

Allianz, representing the National Pension Service of Korea through its AREAP Core I fund, picked up the 50 per cent stake in Darling Quarter for $634 million.

The Darling Quarter asset comprises two campus-style towers across 61,000 square metres.

The office area is currently fully-leased to the Commonwealth Bank for the next 12 years.

“On behalf of NPS and Allianz, we are very happy to be investing in this landmark office building in Sydney, providing long-term value and stable cash flow,” Allianz Real Estate Asia Pacific chief executive Rushabh Desai said.

CBRE’s Flint Davidson, James Parry and Stuart McCann brokered the deal on a sub 4 per cent yield.

Head of international capital Stuart McCann said that commercial markets are seeing record levels of demand from global investors looking to invest at scale.

“This transaction is a great demonstration of this trend and follows 2021 where we saw the highest level of foreign investment into the Australian real estate market on record, with global capital acquiring A$16.6 billion of assets across all sectors,” McCann said.

Allianz Real Estate’s Asia Pacific CEO Rushabh Desai said that the asset provided long-term value and a stable cash flow.

“[The fund] is now 82 per cent committed and this asset provides attractive diversification to the portfolio.”

Set up in Singapore as a Singapore based close-end fund, Allianz and NPS are 50:50 investors in the platform.

The asset has a 6-Star Green Star Design and As-Built certification and 6-Star NABERS Energy and 6-Start Water ratings.

Allianz Real Estate expects to close the deal by the end of the first quarter.

“The pandemic has re-emphasized the importance of micro location, city density, asset quality and ESG when investing in an office asset,” Allianz Real Estate Asia-Pacific head of acquisitions Danny Phuan said.

“Sydney is one of the most liveable cities in the world and the long-term outlook for the Sydney office market remains favourable, supported by robust economic fundamentals, an attractive labour market and strong infrastructure investments,” he said.

It’s the latest in a line of deals that has just included a 50 per cent stake in Singapore’s OUE Bayfront in 2021.

Australia accounts for 20 per cent of Allianz Real Estate’s $12.5 billion investment in the Asia Pacific region.