Google snaps up Pyrmont site

Google snaps up Pyrmont site

15 June 2018

US technology giant Google has dramatically expanded its footprint in Pyrmont, Sydney, by scooping up Channel 7’s Sydney headquarters in a deal worth more than $150 million, reports The Australian.

Google purchased the building at 38-42 Pirrama Road from property developer, Aqualand for an undisclosed price. Google already occupies the entire workplace6 building across the road.

Aqualand bought the building and the adjoining REVY site in 2015 for a combined $180 million. Property agents suggested Google may have paid close to $150 million, given the increase in land values for city fringe buildings in the past three years.

Buying the properties, on Darling Island Road and Pirrama Road, will give Google a stranglehold over Sydney’s prestige Darling Island precinct, a booming technology hub.

The company has had a leasing brief in the office market for about 100,000 square metres since it arrived in Sydney almost a decade ago.

Google is expected to locate its new Australian headquarters In a Dexus owned office tower near Central Station.

Earlier this year, Google struck a deal to take up all space in the nearby Fairfax Media building at 1 Darling Island Road. The newspaper company is now looking for a new home.

Seven is consolidating its offices to Australian Technology Park, Redfern, later this year.

The landmark Pyrmont buildings were originally constructed to warehouse general goods for the Australian Navy and the Postmaster General’s Departments, with No 8 REVY representing one of the few surviving narrow vertical warehouse designs in Sydney, notes The Sydney Morning Herald.

Last year, Google walked away from plans to develop a campus-style head office on the site of the White Bay power station at Rozelle, owned by the NSW government’s developer UrbanGrowth. Subsequent talks about a site at the University of Technology Sydney also were not finalised.

Google’s purchase is another sign that Sydney’s residential development boom is losing steam. Chinese-backed group Aqualand sold the property, which is part of the broader REVY site it bought in 2015 from a consortium including Citta Property Group, Seven Group and Greg Shand of Barana Group for $180m.

Aqualand’s exit is profitable and it is also undertaking a luxury apartment development on a slice of the REVY parcel.

Google’s move also shows the switch from residential developers dominating the purchase of Sydney Harbour properties.

On Wednesday this week, The Australian reported Google has further expanded it physical footprint in Australia, with the technology giant set to officially launch a new office in Melbourne.

The formal announcement is set for July 5 at the T&G Building on 161 Collins Street, in another show of strength from technology outfits muscling into the major metro office leasing markets.