![\"1](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/05\/1_OConnell_Street_Sydney_1.jpg\")
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The precinct includes the 1 O\u2019Connell Street tower (Image: Wikipedia)<\/p>\n
Australian real estate fund manager Charter Hall will be taking full control of an A$1 billion ($725 million) Sydney office precinct after entering into a deal with Lendlease to acquire the remaining 50 percent stake in the set of six commercial properties.\u00a0<\/p>\n
The deal, which was revealed in a joint statement sent to Mingtiandi on Thursday, allows Charter Hall-managed funds to take full ownership of the O\u2019Connell precinct, which occupies a contiguous 6,177 square metre (66,527 square foot) site in Sydney\u2019s financial centre, after the company had paid A$500 million to purchase its existing half stake in the cluster from the Abu Dhabi Investment Authority<\/a> in February.<\/p>\n \u201cFor Charter Hall, the transactions expand its exposure within one of Sydney\u2019s most tightly held and strategically important CBD precincts, enhancing its position in the office sector and supporting future growth prospects,\u201d the ASX-listed fund manager said in the statement. Lendlease, which reported a loss in February<\/a> this year, said the sale was a \u201cdisciplined capital recycling initiative.\u201d<\/p>\n The six assets in the O\u2019Connell precinct, which include the 36-storey 1 O\u2019Connell Street tower, currently produce more than A$50 million in annual income, and the location is planned as the site for Sydney\u2019s tallest office building.<\/p>\n Ready for an Office Rebound<\/p>\n \u201cSydney\u2019s CBD office market continues to outperform nationally, supported by resilient occupier demand. These dynamics are driving continued pricing tension for core office assets reinforcing Sydney\u2019s position as a leading gateway market in the Asia Pacific region,\u201d Lendlease and Charter Hall said in the statement.<\/p>\n Charter Hall managing director and CEO David Harrison<\/p>\n Lendlease spent nearly ten years assembling the properties in the O\u2019Connell precinct, with the buildings held by its Australian Prime Property Fund Commercial (APPF Commercial).\u00a0<\/p>\n \u201cFor APPF Commercial, the divestment represents a disciplined capital recycling initiative, crystallising value and enhancing portfolio quality to support long-term value creation and performance for its investors. Following completion, the fund will be focused on its portfolio of 100% prime office assets,\u201d the statement said.<\/p>\n The transfer is being executed in phases, with the first step including contracts already exchanged on 19 O\u2019Connell Street and strata lots within 23 O\u2019Connell Street within the precinct, the statement said. Charter Hall has also accepted a pre-emptive offer for the remaining interests in 1 O\u2019Connell, along with 8, 10, 16 Spring Street and remaining strata lots in 23 O\u2019Connell Street and will exchange contracts in \u201cthe coming weeks,\u201d per the document.\u00a0<\/p>\n The precinct includes heritage-listed buildings alongside offices, shopping complexes, hotels, restaurants and clubs.<\/p>\n A redevelopment application has been submitted seeking approval for plans involving options which would include development of a 72-storey office building connected to 1 O\u2019Connell, according to project documents<\/a> on the NSW government website.\u00a0<\/p>\n The sale of the precinct comes as Lendlease works to offload A$2.8 billion in assets following a strategy reset in May 2024, with the developer having reported an A$318 million loss for the six months<\/a> to the end of December.\u00a0<\/p>\n Record Fund Inflows<\/p>\n Charter Hall said in February<\/a> that during the second half of 2026 it had reaped A$4.8 billion in equity inflows on a gross basis, marking its largest such fundraising in three decades.<\/p>\n Adding to its portfolio of commercial real estate, the company in March received regulatory approval to take over management<\/a> of A$1.2 billion in property funds backed by Melbourne-based superannuation fund CareSuper.\u00a0<\/p>\n In February Charter Hall added some retail assets to its portfolio with the purchase of three sub-regional shipping centres<\/a> in Sydney, Melbourne and Brisbane from LaSalle Investment Management for A$360 million.<\/p>\n![\"David](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/05\/David-Harrison-of-Charter-Hall.jpg\")
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