A $400 million office skyscraper is to be developed by Leighton Properties in North Sydney, which will be the contractor and developer's head office from early 2016.
It will be the first new development in the area for about six years with 40,000 square metres across 30 storeys.
Leighton is currently based at St Leonards and has signed a lease as the anchor tenant for 76 per cent of the office tower.
Located in the old Norberry Terrace, at 177 Pacific Highway and Berry Street, Leighton has agreed terms, as yet undisclosed, to buy the asset from the private developer Winten Property. Leighton would then look to onsell the asset through agents Jones Lang LaSalle and CBRE.
The deal comes as the north shore office market labours under a vacancy rate of 11.2 per cent, with North Sydney sitting at 10.8 per cent, although the vacancy rate is only at 2.8 per cent for prime office assets.
During the first half of this year, some offices in the area were earmarked for conversion into residential towers.
The managing director of Leighton Properties, Mark Gray, said the project fitted into the group's core competency of CBD commercial development. He said the remaining 10,000 square metres in the tower would be available to other corporates. "We have developed a number of the prime North Sydney towers in the past and we feel the area is worthy of a new development of this kind."
The designer is Bates Smart.
The chief executive of Leighton, Hamish Tyrwhitt, said the development would consolidate 11 buildings occupied by Leighton which were of differing quality, density, fitout and age.