Macquarie wins $3b contract to develop Martin Place

Macquarie wins $3b contract to develop Martin Place

14 September 2018

Macquarie Group has secured the rights to design and deliver a new $3 billion integrated railway station development in Martin Place, Sydney, reports The Australian

The NSW government awarded Macquarie a $378.6 million contract to deliver the largely underground station component of the new Martin Place metro station, including new underground pedestrian connections and improvements to the public domain.

Under the deal Macquarie (MQG), along with its design and construction contractor Lendlease, will integrate the new metro station with a retail and recreation precinct, two new office towers and the existing Martin Place railway station that services the Eastern Suburbs and Illawarra Line.

Macquarie had been granted the exclusive right to the site without a public tender using a controversial procedure known as an unsolicited proposal. Listed landlord Dexus also submitted such a proposal in December 2016 but it was rejected, says the AFR

Taxpayers are likely to bear only a small portion of the cost of the project, after Macquarie Group agreed to pay the government $355 million for the right to build towers to the north and south of Martin Place, Transport Minister Andrew Constance announced on Wednesday.

Once the new buildings are complete in about 2024, Macquarie is likely to make another payment to the government to reflect the increased value of the land.

“This is largely obviously the erection of two new commercial towers but more importantly for commuters a brand-new metro station integrating into Martin Place Station and the T4 line,” Mr Constance said.

According to the government, this is the first metro station development to be integrated in this way.

The project has been pitched as having a design informed by New York’s World Trade Centre station and Hong Kong’s International Finance Centre.

Macquarie said that its approach to the development allowed for “unique features” that would be difficult to achieve were the station to be delivered independently of the over-station development.

“These include easy transit for commuters between the suburban and metro railway lines, natural light down to the metro platform level and significant public concourse space, adding a sense of arrival into the CBD,” Macquarie Group chief executive officer Nicholas Moore said.

The investment bank’s plan will significantly boost the quantum of office space in the city when at least two rival mega-projects are searching for tenants. The development will include about 95,000 square metres of new space into the Sydney market by 2024.

The sheer scale of the project — with an estimated end value of about $3 billion — effectively marks the return of the powerful Macquarie operation to the real estate scene.

It is estimated that more than 2,500 jobs will be created during the construction phase of the project.

The metro station is part of the Sydney Metro City & Southwest project, expected to cost between $11.5 and $12.5 billion, says The Sydney Morning Herald.

That project will connect metro rail services from Chatswood, through a new line under the harbour and city, to Sydenham, where they will run on the existing Bankstown Line.