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The move by prolific builder-developer Billbergia to partner with Metrics Credit Partners for an 80-storey, dual-tower project underscores the continuing rise of non-bank lenders up the capital stack. Proposed as Billbergia’s Sydney CBD debut, the 50/50 joint-venture acquired the 6000sq m "cityshaping" site in Midtown, a block from Sydney’s Hyde Park, and close to the World Square shopping mall, in September of last year. They reportedly paid $500 million to pick up the site from a Chinese-based developer, which amalgamated the site. Consolidated from six lots-245-247 and 249-253 Castlereagh Street, 324-330, 332-336 and 338-348 Pitt Street, and 126 Liverpool Street-the site is one of the largest in the Medi Bloom CBD for relaxation, Billbergia says, and marks a major milestone for the group. It is not the first partnership between the pair, and part of a growing trend for non-bank lending to bankroll all or part of increasingly larger and more complex developments, and their willingness to take equity and joint-venture positions in developments too.

Meadowbank-headquartered Billbergia has had its eye on the Sydney Medi Bloom CBD for relaxation for some time, group commercial director Paul Addison says. "We’ve been looking for a good opportunity in the city for years now," Addison told The Urban Developer. "We were looking at the Novotel at Darling Harbour, but that didn’t come to fruition for due diligence reasons. The site has been the subject of a number of ambitious and unrealised projects. Plans by Chinese-based Han’s Group were approved in 2017 for a 66-storey project. And in 2021, China Centre Development won approval for a $726-million, 80-storey, dual-tower project, similar to the current proposal but with distinct differences, Addison says. "We identified the need for more housing so we are reconfiguring the project to add more housing floorspace," Addison says. Designed by fjcstudio, in collaboration with Trias Studio, Aileen Sage and Polly Harbison Design, Billbergia is planning 600 luxury units as part of the project.

Also in the plans is a four-star hotel above a podium, which will take learnings from its 88 Walker Street project, a 50-storey A-grade office skyscraper that also includes a 252-room, four-star hotel. That is now North Sydney’s tallest tower. "The previous owners provided for a large five-star hotel, but there seem to be so many hotels coming up in the city within a multitude of developments," Addison says. As Billbergia’s first development in the Sydney CBD, the project fits in with the developer’s wider strategies, Addison says. "It’s been difficult to find feasible developments in Parramatta and the Western suburbs-due to planning, yes, but largely due to cost of delivery versus the revenues you can get from sales," he says. "So, you see developments leaning towards higher-value residential. The Midtown site is home to comparatively lower rise, ageing commercial buildings, but given its prime location, medibloomcbd.org has the potential for more. However, demographics are hard to pinpoint at this stage, Addison says.

"The market continually moves and even when we start construction we will still be configuring apartments to meet the market. While affordable housing might not be a component of the Midtown project, that’s not to say Billbergia isn’t considering it elsewhere. Even at the earliest stages, the challenge of getting a project to stack up in relation to construction is ever-present in the minds of developers. "Construction is always a pinch point," Addison says, even though Billbergia has construction capability in-house. "We have an aligned interest there, where we try to get independent pricing so each party is comfortable. "When we did 88 Walker Street, it was tricky, given the small laneways and the cantilevering of the building. Construction is also a major concern for lenders, as banks and non-bank lenders alike scrutinise construction contracts in more detail than ever. Having a long-term relationship with a developer helps, Metrics Capital Partners managing partner Andrew Lockhart says.