GURNER buys Sydney Harbour site for $800m luxury residential project

Property mogul Tim Gurner's eponymous company has acquired a prime Sydney Harbour site on the doorstep of Barangaroo, with plans to build a 34-storey two-tower "ultra-luxury" residential project aiming mimic what GURNER has done at the $550 million development Saint Moritz in Melbourne's St Kilda. 

GURNER has acquired the site on 189 Kent Street from Greg Shand's Barana Group, which since 2002 has held the property that only recently was granted planning approval for a residential development after a lengthy process.

The 1,195sqm site, adjoining the Barangaroo precinct, currently houses a commercial office tower that was built in the 1960s, with current tenancies in place that GURNER will hold until completion of leases.

It is the second transaction the two companies have completed together after GURNER first partnered with Barana Group in 2018 to develop St Kilda’s former Novotel site into one of Melbourne’s most exclusive addresses, Saint Moritz.

Unlike that project however, the $800 million Kent Street project is a direct acquisition from GURNER and will not be developed as a joint venture.

The Kent Street deal represents the first seed site to have capital deployed within GURNER's $2 billion build-to-sell (BTS) development fund, which is backed by a global institutional investor. The developer currently has a $10 billion national pipeline of BTS and build-to-rent (BTR) assets across Australia.

Gurner Group CEO Tim Gurner says this is a chance to deliver a "Saint Moritz level of luxury in one of the most crowning development sites in Sydney".

"Kent Street represents one of the most prestigious development sites in Sydney; from the moment we were introduced to the site we knew we had," Gurner says.

"Sydney and this key strategic site in particular is crying out for an ultra-luxury offering like Saint Moritz that transports its owners into a world of luxury and service above anything else in the country, inspired by the best hotels around the world."

"This site is positioned within one of the most expensive and luxurious locations in Australia so we plan to take what we know from Saint Moritz and apply it on a whole new scale, to offer the market something that is completely unique in terms of design, luxury, service and amenity."

He says the partnership with Barana five years after transacting with the company in St Kilda is "quite the coincidence".

"I’ve come to know Greg [Shand] exceptionally well throughout the Saint Moritz journey and I know he is proud of the pipeline he has built and in particular the successful planning approvals achieved at Kent Street so he wouldn’t entrust this site with just anyone," Gurner says.

"We’re certainly across the challenges the development industry is currently facing in regards to construction and interest rates. We’ve taken a conservative view to pricing and feasibility and feel supremely confident on the fundamentals of this site and its success.

"We have been watching the market very carefully for 18-24 months waiting for the right time to utilise the capital we have at our disposal, waiting for great opportunities knowing we can act quickly for the right sites, with a particular eye on Sydney and Melbourne."

He adds that in other states it is construction and labour costs that are putting pressure on projects, giving Sydney a "strong opportunity with its higher price-per-square-metre average, motivated buyer pool and sought-after postcodes for offshore and local buyers".

"Sydney is a very unique market with an incredibly low amount of supply and an even smaller opportunity to acquire great sites with harbour views. It is even rarer to be able to transact on a site that also has planning approval ready to go," Gurner explains.

"Our vision to create a city-defining, ultra luxury address with New York-style whole-floor residences, gives us the freedom to create something truly incredible, with a level of class and luxury that we know Sydney is ready for."

The Kent Street site has an existing approval in place for two towers, ground-floor retail, restaurants and bars, a health and wellness component, and basement carparking. GURNER will now be seeking small amendments to the approval to reduce the number of apartments and increase the amenity provisions, in line with its vision for the site.

FJC Studio has been appointed as architect for the project, having won a competitive design competition between local and international architects.

The deal was brokered by Justin Brown, Tim Rees and Ben Wicks of CBRE.