Brookfield Property Partners has sold a half stake in its landmark Sydney development project to AMP Capital and EG Funds Management for close to AUD1bn (€670m).

Industry sources confirmed to IPE Real Estate that AMP Capital and EG Funds Management have each acquired a 25% share in Wynyard Place, which has an end value of AUD1.8bon.

Brookfield, which declined to comment, has retained a half stake in the project, which is due for completion in mid 2020.

Market sources familiar with such deals told IPE Real Estate it would have cost AMP Capital and EG between AUD450m and AUD500m each.

Brookfield hired JLL to run a global marketing programme for the project earlier this year and reportedly had conversations with Korea’s National Pension Scheme and other offshore groups.

The search ended in Sydney itself, with the two local fund managers winning the bid against other domestic competitors.

Some reports suggested that the investors would likely have done the deal at 4.5% yield.

An industry executive said: “It is highly likely that these are fund-through deals, meaning the investors will part-fund the project during construction.”

The source said such an approach is tried and tested in Australia by leading Australian groups that use it to reduce financing costs.

He cites the example of Lend Lease, which, last December, brought in Ping An Insurance and Mitsubishi Estate as capital partners to fund its AUD1.5bn office development in Circular Quay, on Sydney Harbour foreshore.

“It is likely that Brookfield will hold its 50% stake on the balance sheet and then progressively sell down its share to other investors,” he told IPE real Estate

One possibility is that Brookfield will use its share of Wynyard Place and other Australian office assets it owns to seed a core office fund in Australia.

In December, Brookfield signed a 12-year lease with one of Australia’s large four banks, National Australia Bank, making Wynyard Place its Sydney headquarters, occupying 31,000 square metres.

At the time, Carl Schibrowski, Brookfeld Property Partners’ head of development, Australian Office Division, said Wynyard Place had been designed to be integrated into Sydney’s AUD2.1bn light rail project. Its transit hall will link with a pedestrian walkway and light rail project on George Street.

Brookfield inherited the site when it made a successful AUD409m bid for the Singapore-based company Thakral Holdings in 2012.

It was finally given the green-light in 2016 to commence construction on what is a massive redevelopment project involving several office buildings, sitting on top of one of Sydney’s key transport nodes, the Wynyard train and bus stations.