Quay Quarter Sydney
From 2015 to 2022, Matt Spillane worked alongside AMP Capital in the development, leasing and investment management of Quay Quarter Sydney (QQS).
| Client | AMP Capital wholesale funds, AWOF + ADPF |
|---|---|
| Location | Sydney CBD |
| Type | Office, retail, hospitality |
| Total lettable area | Office component ~120,000sqm and ~7,500sqm of retail |
Background
QQS is a precinct re-development incorporating approximately 11,000sqm of land over three separate sites, including:
50 Bridge Street (now Quay Quarter Tower)
Young and Loftus Street site (now Quay Quarter Lanes + includes 106 luxury residential apartments, laneway retail and boutique office space)
33 Alfred Street (heritage listed AMP head office)
Scope
The project included three separate deliverables which were a key component of my role as Investment Manager:
Reaching Development — for the development to commence, a number of key actions needed to be achieved:
Transacting on the sale of 33 Alfred St to the developer, being the AMP Capital wholesale funds, AWOF + ADPF.
An exhaustive review of the existing 50,000sqm 50 Bridge Street building to confirm it was not a viable long-term investment, including the possibility of leasing the asset "as is" vs. the minimal capital spend to achieve returns in the medium-term.
Undertake complex commercial early surrender negotiations for numerous office and retail tenants to deliver vacant possession in a timely manner.
Secure pre-commitment from a future tenant for ~30,000sqm (35-40%) of the total QQT space.
Driving the leasing process — including:
Appointing Leasing Agents — reviewing potential candidates and, in consultation with the client, selecting successful agents.
Finalising the Leasing Strategy — working thorough recommended leasing strategy and present these to the client and key stakeholders. Once approved, devise and commence a marketing campaign to secure further pre-commitments.
Negotiate Lease Deals - alongside the AMP Capital development team, developing the commercial terms of the lease deals, including Heads of Agreement and other lease documents. This phase also included negotiating and mitigating lease tail risks for new tenants; engaging with their existing landlords and overseeing sub-leasing campaigns with appointed leasing agents.
Maximising building amenity to create a compelling value proposition — including:
Championing the ambitious concept of a base building led ‘flex space’ offering on the lowest two floors of the building (~4,300sqm over 2 floors) — a practice widely used in the USA and UK, yet not seen before on this scale in Australia. This included a complimentary lounge area for building occupants plus meeting rooms and flexible workspace desks/offices on a user-pays, market-rate basis.
Evaluating the viability of flex space; including identifying and integrating best-practice models. This included a partnership approach to provide greater alignment and increase the ability to secure a quality operator capable of delivering an ambitious fully integrated model.
Ensuring a strong focus on connectivity and the creation of generous and diverse spaces that would be highly valued by QQT customers.
Domestic and international travel to gain insight into the operation of these types of spaces; identifying and engaging with industry experts to help create the right business model.
Creation of the flex space brief, including RFP document, as well as lead the RFP process with eight domestic and international operators participating. Following an extensive period of negotiations the deal was recently finalised with one of Singapore’s leading operators, The Work Project (TWP). The facility is due to be fully operational by August 2022.
Quay Quarter Lanes
The Quay Quarter Lanes component commenced opening in the second half of 2021. Matt’s focus was undertaking investment manager role for the retail and office components.
With Hinchcliff House as an anchor, the retail shops have almost all been leased by a range of exceptional food and beverage operators. Whilst COVID-19 has delayed operators opening, the laneway development is an exemplar for boutique retail, and looks forward to seeing an uptick in patronage as workers return to their offices in 2022.
