Pembroke Real Estate, an international real estate advisor that acquires, manages and develops properties, first entered the Australian market in 2011 with its purchase of 20 Martin Place, located in the heart of Sydney’s central business district. CBRE’s Capital Markets team guided the AU$95 million transaction, advising both the buyer and seller. Pembroke planned to base its Sydney operation in the 22,000-square-meter building, and lease the remaining office and retail space to anchor tenants.
The tower, built in 1974, was antiquated. But 20 Martin Place could not be replaced, only refurbished, since its height exceeded Local Environmental Plans adopted after the tower was built. A massive renovation posed multiple challenges: The 22-story building was located on a busy plaza and was fully occupied by an existing tenant. Since Pembroke was new to the Australian market, the company needed best-in-class advisors to help navigate local market nuances and guide the transformation of 20 Martin Place.
Solution & Outcome
Pembroke turned to CBRE’s Advisory & Transaction and Project Management teams for help. After a competitive bidding process, CBRE Project Management was chosen to supervise the AU$120 million redevelopment.
The team’s goal was to preserve the tower’s clean-lined, mid-century modern aesthetic and deliver a cutting-edge, sustainable workplace, achieving a 5 star NABERS energy rating and a 5 star Green Star Office rating. They also sought to enhance the visual character of the immediate area surrounding the tower, which consists of an outdoor pedestrian mall on one of Sydney’s most iconic streets, known for its historic sandstone buildings and World War I memorial.
The developer stripped the existing 22-story building down to the steel skeleton and relocated the building’s core to the north side. This remarkable feat of engineering allowed for an additional 160 square meters per floor and more flexible floor plates. During construction, asbestos was discovered and had to be mitigated following strict protocols.
Throughout the project, CBRE and Pembroke functioned as a close-knit team, seamlessly communicating as issues arose, applying the appropriate skillsets and managing the various stakeholders to ensure successful delivery of the building.
The team incorporated state-of-the-art building systems and added a high-performance façade that improves lighting, heating and cooling efficiency. The façade is made of 420 overlapping rows of dichroic glass panels, creating a shimmering exterior of reflective shingles. Their subtle sandstone colour and sculptural texture offer a modern complement to the heritage structures on Martin Place. To improve the connection with the streetscape, the team added a three-story glass retail podium to the building’s base, extending it to a side lane that had once been a blank wall.
The re-development incorporated efficient water fixtures and low-toxicity finishes; reduced the number of car spaces; and provided end-of-trip facilities for more than 100 bikes. The team surpassed its sustainability goals with the Green Building Council of Australia awarding the building a 6 star Green Star As Built v3 rating, garnering a rare ‘World Leadership’ status as a green building.
As the new tower took shape, CBRE Office Leasing and Retail Services professionals tackled the leasing effort. The team faced a highly competitive market, as 20 Martin Place was part of a AU$1 billion renaissance of Sydney’s CBD. Although floorplates were smaller than competing spaces, CBRE emphasized the quality of the fit-out, sustainability credentials and 360-degree views of Martin Place. The team also focused on the pivotal location, near trains, buses and ferries, as well as a new light rail service.
By the time the building opened in 2015, the CBRE team had leased 70 percent of the space, surpassing the base case underwritten rents and valuations. The anchor tenant is a global technology company, which took 6,200 square meters over multiple floors. Other office tenants include Hogan Lovells, REGUS, LogMeIn and Vanguard, with the building now 100% leased. The three levels of retail include an ANZ bank branch, a global flagship Omega store and a state-of-art Tesla showroom.