Building on a city revival

The northern end of George Street is to undergo a multimillion-dollar revamp with the redevelopment of key buildings that have recently changed hands.

The spotlight is also shining on the area with the construction of the $6 billion Barangaroo South precinct that stretches around the harbour from Circular Quay. It will bring workers and tourists to the northern and western parts of the city.

This week's nod for James Packer's Crown Limited to advance the approval process for its hotel and casino at Barangaroo South will also flow back to the city.

A research paper by Jones Lang LaSalle says the 284,000-square-metre commercial development at Barangaroo has the capacity to meet only 50 per cent of the projected demand in the Sydney city office market during the next 10 years.

The latest office assets sold include Mirvac's half-share in 190-200 George Street, which went to the unlisted AMP Capital Wholesale Office Fund for $317 million.

The property will be demolished for a new state-of-the-art skyscraper anchored by tenancy advisory firm Ernst & Young.

AMP Capital property funds management head Chris Judd said the acquisition was consistent with the group's strategy to remain focused on core, well-located office towers.

He said the pending redevelopment of the northern end of the city was a contributing factor because it was already attracting high-calibre tenants.

To extend its foothold, Mirvac paid $584 million in May for a portfolio of assets from GE Capital, which included the office tower at 210-220 George Street. The Mirvac assets are in an area known collectively as the Alfred, Pitt, Dalley and George streets (APDG) site.

Mirvac chief executive Susan Lloyd-Hurwitz said 200 George Street would be a landmark premium-grade asset in the financial and legal core of the Sydney central business district.

The biggest site, which is still in abeyance for a possible redevelopment, is Valad Property Group's Gold Fields House at 1 Alfred Street. Valad is now owned by the US-based Blackstone Group.

Under the latest proposals, Valad has lodged a development application to rebuild Gold Fields House into upmarket apartments and an adjoining retail space.

The next popular site understood to be for sale and redevelopment is the four-storey building that is home to the Jacksons on George bar.

In April, Marcus Ayres and Stephen Parbery, directors of PPB Advisory, were appointed as receivers and managers to a number of companies in the Kavia Holdings Group, which owned the Jacksons on George pub and three other venues.

At the time, Mr Ayres said it was PPB's intention to have a period of trading followed by preparation of the venues for a going-concern sale.

Until then, the four venues will operate on a business-as-usual basis, he said.

The pending sale of the property - with, or without, the pub - comes at a time when Sydney has the oldest office-stock profile in Australia, with almost half the CBD office stock more than 30 years old.

With developments such as International Towers Sydney at Barangaroo South delivering the next generation of office product to the CBD, the city will become a leader in sustainable office design.

The head of office leasing NSW at Jones Lang LaSalle, Tim O'Connor, said International Towers Sydney, along with other developments at 200 George Street and further north at 5 Martin Place and 48-50 Martin Place, would deliver space into the Sydney CBD market between 2015 and 2017. These developments have secured tenant pre-commitments since mid-2012.