Barings Pays $360m for Office Tower at Darling Square

Barings has paid $360 million to pick up the leasehold interest in Sydney’s Darling Square as it expands its premium office portfolio in Australia.

The deal was executed via Barings’ fifth Real Estate Australia Value Add Fund (BRAVA V) and adds a landmark, ESG-certified asset to the group’s growing Australian holdings.

Darling Square is a 13-level office tower developed by Lend Lease comprising 27,750sq m of net lettable area.

The property also includes retail tenancies and 451 carparks. It has market-leading sustainability credentials, including a 5.5-star NABERS Energy rating, 6-star Green Star Design & As Built, WELL Platinum certification, and Climate Active Carbon Neutral Certification.

Barings Real Estate Australia executive director, investment management, Shaun Hannah said Darling Square was a “best-in-class asset”, strategically positioned in the Darling Harbour precinct.

He said its premium quality, strong ESG profile and blue-chip tenant base, anchored by the Commonwealth Bank of Australia, made it a compelling long-term investment.

The acquisition is subject to Foreign Investment Review Board approval.

▲ Inside the “best-in-class” Darling Harbour asset Barings Real Estate Australia has acquired.

Meanwhile, Barings has partnered with Aware Real Estate to each acquire a 50 per cent interest in Home HQ Artarmon from a fund managed by Growthpoint Properties Australia.

The large-format retail centre at 1 Frederick Street on Sydney’s Lower North Shore has changed hands for $180.1 million.

It comprises 23,135sq m of gross lettable area across three levels including a multi-level basement carpark.

Freedom Furniture, Nick Scali and The Good Guys anchor the centre that also has 25 other homemaker tenancies.

Growthpoint’s managed fund acquired Home HQ in 2018 with BlackRock’s APAC Real Estate team.

The fund invested $9 million in capital improvements and implemented a targeted leasing program during its ownership. The proportion of space leased to national or ASX-listed tenants grew from 71 per cent in 2018 to 93 per cent now. More than 3400sq m of space was leased over FY25, including new food and beverage anchor Depot Brewery.

Growthpoint executive director of funds management Sam Sproats said the company acquired the asset with the intention of repositioning the tenancy mix to enhance the income profile.

“We are proud to have delivered this strategy, and with a ‘full house’ of complementary tenants, the new owners can look forward to strong demographic growth,” Sproats said.

“As we realise the value of the asset at the end of the fund term, our investors can be very satisfied with the repositioning delivered and value created.”

Aware Real Estate transactions manager Zak Felton said the acquisition aligned with the company’s east coast retail strategy and “makes it a compelling addition to our portfolio”.

▲ Home HQ Artarmon major homemaker retailers include JB Hi-Fi, Freedom Furniture, Nick Scali and The Good Guys.

Barings Real Estate Australia head of real estate Gareth Price said the company invested a 50 per cent share via its BRAVA V Fund, the fifth fund in the Australia Value Add Fund series launched in 2010.

“This transaction marks BRAVA V’s third acquisition since September,” Price said.

“Home HQ Artarmon [is] a centre that continues to demonstrate strong performance and exceptional tenant demand due to its scale, scarcity and established trading position.”

Aware Real Estate, launched in 2022, manages Aware Super’s directly owned Australian industrial, office, retail and mixed-use property portfolio with around $2 billion in assets under management.

Barings is a global asset management firm with more than $720 billion in assets.

The acquisition follows Aware Real Estate’s purchase of The Barracks in Brisbane for $150 million in what was a busy October domestically and internationally.

That month, the superannuation fund also acquired a 49 per cent stake in a $2-billion US industrial platform with Goodman Group, spanning almost 3 million square metres of building area across Los Angeles’ key logistics corridors. 

Aware Super and Barings are also understood to be close to finalising a deal worth around $300 million to acquire Frasers’ Brunswick & Co build-to-rent development near Brisbane’s Fortitude Valley train station.