The Discovery of 275 George Street

One property proposed by TH Real Estate in 2018 was a development project called 275 George Street. With a great location close to Wynyard Station, one of the main train stations in the Sydney CBD, and facing George Street, a major north-south arterial road running through the city center, the property had exactly the uniquely favorable location that Daibiru wanted. The building would have 15 aboveground floors, two underground floors, and total rental floor area of 7,200 m². The development plans called for commercial retail space on the ground floor, an underground shower facility for tenants called End of Trip, and an underground bicycle parking garage.

The site was owned by the John Holland Group (JHG), the fourth-largest construction contractor in Australia’s non-residential sector with a history spanning more than 65 years. JHG had been looking for a forward funding investor—an entity to which it could sell ownership of the property, and which would outsource development work (design, construction, and tenant leasing) to JHG.

In Australia, financial institutions are cautious about the development projects they finance, so this method of investment in which investors rather than financial institutions provide developers with development funding during the initial phase of development had become popular. The advantages of the forward funding method are that the developer is able to secure both development funds and a buyer during the initial phase of development, while the investor is able to receive early project guarantees and avoid development risk.

In addition to the advantage of having a new building in a favorable location, development would be carried out by JHG, a company with a proven track record, and TH Real Estate would provide Daibiru with support as an asset manager. Because the conditions for Daibiru’s first foray into Australia were thusly ideal, JHG was informed of Daibiru’s interest, and they sat down with TH Real Estate to negotiate a contract.