St Hilliers has teamed with the fifth in Macquarie's MREEF series of property funds in a joint venture to develop the Bond Store 1 site at Walsh Bay. Contracts have been exchanged to purchase the commercial office site.

The development opportunity has been acquired from Walsh Bay Finance (a Mirvac/Transfield joint venture) and will be the last major stage of the successful Walsh Bay redevelopment. NSW Maritime will remain the landowner and the property will be subject to a 99 year lease upon completion.

The site, Bond Store 1 at 26 Hickson Road, Millers Point, has existing DA consent for the construction of a new eight-level A-grade commercial/retail development. The new building will comprise 9000 square metres of net-lettable area in addition to parking for 175 cars. St Hilliers will also restore and refurbish the adjacent Breezeway 8-9, which is also the property of NSW Maritime, as part of the development requirements.

The Bond Store 1 property is located on the northern side of Windmill Street and is bound to the north by Hickson Road and to the west by the Windmill Steps. The site's existing building was constructed in the mid 1960s and comprises a five storey reinforced concrete structure with rendered brick facades.

St Hilliers will be the Development Manager of the project with key responsibilities for project management and leasing of the new building. St Hilliers and MREEF5 will fund the development. MREEF5 is the fifth in Macquarie Property's series of property equity funds, which are currently participating in projects with an end value of more than $1.5 Billion.

St Hilliers Executive Chairman, Tim Casey said the Millers Point area has been transformed in recent times into a highly desirable mixed residential/commercial area through the conversion of the former bond stores, maritime infrastructure and finger wharves.

"More companies are being attracted to this northern peninsula of the CBD with Multiplex, Optimedia and MoJo Advertising among those who have recently moved to Walsh Bay. The recent design competition for the Patricks Terminal has increased the profile of the whole north-western peninsula of the CBD. The increased popularity of the western corridor is demonstrated by American Express recently signing a pre-lease deal in the area," Mr Casey said.

"Millers Point forms the western section of The Rocks district and we are very familiar with the area as our head office is located in Cumberland Street in The Rocks. We believe the whole area is a very attractive place for businesses seeking prime office space close to the CBD, particularly with generous parking."

Mr Casey said, "St Hilliers and MREEF5 are aiming to develop an environmentally efficient building for the site, which will reduce the need for high operating costs and will be an attractive incentive for prospective tenants. We will be aiming for a rating higher than the 4.5 ABGR rating currently proposed for the building. All levels receive good natural light, with some having city and harbour views. The centrally located lift/services core will enable multi-tenant occupancy."

The Joint Venture partners will begin looking for prospective tenants shortly.