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Sydney's low office occupancy rates could get a much-needed boost after a private property developer won the backing of investment specialist Merricks Capital to build the world's tallest hybrid timber tower in the heart of the city.
The $2 billion partnership with Milligan Group will facilitate the construction of a 55-storey mixed use commercial tower on the corner of Pitt and Hunter Streets in central Sydney.
The 220 metre building site will stand alongside the planned Hunter Street metro station, which is due for completion in 2030.
Dan O'Donoghue, head of private credit at Merricks Capital, said the $465 million funding would revive Sydney.
"This is another step in the transformation of the City of Sydney, and the development, valued at approximately $2 billion once complete, will have strong cultural and economic benefits," Mr O'Donoghue said.
Milligan Group founder James Milligan said the acquisition, which has been five years in the making, would enable the development of a world class, sustainable, mixed-use office building.
"This is a new generation, sustainable office building. As employers encourage staff back to the office post COVID-19, feedback from employees has been around shortening the commute and working in high quality, sustainable spaces designed for collaboration and lifestyle," Mr Milligan said.
Merricks chief investment officer Adrian Redlich said after extensive risk assessment, the investment was still solid.
"We have worked closely with the Milligan Group and other stakeholders to reduce the risk of the project through positive planning outcomes, a clear pathway to repayment of our facility and the construction of a world class office building," he said.
