Australia’s REST Super has joined a three-way partnership with two funds, managed by AMP Capital, to underwrite the development of an AUD2.7bn (€1.7bn) office complex in Sydney.

REST Super has committed AUD900m to become an equal partner with the AMP Capital Diversified Property Fund (ADPF) and AMP Capital Wholesale Office Fund (AWOF) in the project, known as Quay Quarter Tower.

The 50-storey project, designed to set new benchmarks in sustainability, is located at Circular Quay on a site owned by the two AMP Capital funds.

Brendan Casey, REST Super’s general manager investments, told IPE Real Assets that, when its commitment to the project is fully drawn down, Quay Quarter Tower will be the super fund’s single biggest property investment.

The AUD50bn REST has been involved with forward funding projects previously, he said.

Asked about what is a record price paid for a stake in a Sydney office project, Casey said: “With interest rates so low, probably prices are reasonably high.”

“But,” he added, “it is such a rare opportunity to get what is potentially the premium building in Sydney. And Sydney is the premium city of Australia.

“We are confident it will pay off in the long term.”

AMP group would be the cornerstone tenant and would take up a large portion of the space, he said.

AMP Capital’s global head of real estate, Carmel Hourigan, said: ”AMP Capital has secured a major anchor tenant in the development, with AMP group committing to 36,500sqm of the Quay Quarter Tower (QQT)  at 50 Bridge Street from 2021.

“We are pleased with the level of interest in QQT and are well progressed in discussions with potential major tenants,” she told IPE Real Assets.

Hourigan said: “On behalf of our investors, we couldn’t be more excited to announce the start of construction of Quay Quarter Tower, with the appointment of tier one builder, Multiplex, as our construction partner.”

Quay Quarter Tower is due for completion in late 2021. It is part of the Quay Quarter Sydney precinct, incorporating the Tower, 33 Alfred Street and the Young and Loftus Streets mixed-use area.