Client story

Identifying a repositioning opportunity helped us sell a high-profile office building for our client.

Detailed feasibility scenarios, asset positioning and targeted marketing resulted in a strong sales outcome for the 50-year-old Sydney building.


Capital markets, environmental, social and governance (ESG) advisory, office leasing and project and development services


Over $50 million


307 sqm per floor x 14 floors. Total net lettable area 4412 sqm



How do you sell a vacant office building without a sustainability roadmap?

Our client owned a 1975 office building in York Street, Sydney, which had been unoccupied for three years.

It was ready to sell, but the building had zero sustainability credentials at a time when high-quality, zero-carbon ready buildings were highly sought after by investors and tenants.

Any works to the building to make it operational again would have likely triggered requirements from the local authority, City of Sydney, for a minimum 5.5-star NABERS rating for refurbished properties, and operation as a net zero asset by January 2026. Further, the asset was not compliant with the Building Code of Australia.

JLL was appointed to sell the property after recently selling a similar building nearby at 139 Macquarie Street. Our array of property services which could be drawn upon to deliver the best result also appealed to our client.

Demonstrating upgrade scenarios allowed buyers to see the building’s potential

For buyers, this building was a unique opportunity to add an asset in a prime pocket of Sydney to their portfolio. Part of the building’s attraction was its proximity to a major train station. As the office was vacant and requiring significant refurbishment, it would appeal to investors with a wide range of uses in mind.

Before marketing the property, we analysed whether a complete sustainability-led refurbishment of the building would work out more financially beneficial to the client as well as the investors in terms of rental performance.

Our capital markets, ESG advisory, leasing, project and development services (PDS), research, and debt advisory experts put their heads together to develop a case study. We found that there were no sustainable buildings of similar scale in the vicinity, nor were there any available or planned for the entire Sydney central business district.

With the peak demand years for zero-carbon buildings identified as 2024, 2028 and 2030, and no supply in the pipeline, we presented two upgrade scenarios over a six-year investment period which would help our client determine its next steps, as well as help us establish the true value of the property.

As well as helping our client, our analysis would help potential buyers if the client decided to sell the building in its current form. We came up with the following scenarios:

Scenario one: Improve the building to a 5.5-star NABERS Energy-rated asset.

Scenario two: Take the asset to a zero-carbon ready status, that being all electric, powered by renewable energy and highly energy efficient.

Our leasing team prepared a leasing strategy and tracked rents of similar properties. It predicted rents for scenario one to be slightly lower than the alternative, despite anticipated rental growth at lease renewal in 2028.

Our PDS team provided guidance on the cost to bring the building up to a lettable standard and meet Sydney's 5.5-star NABERS Energy rating requirement. The team found that the minimum works required for the building to remain competitive were a lobby upgrade, a new ‘end-of-trip facility’, such as showers, storage and bike racks, and an additional fire stairwell for compliance.

An additional stairwell would reduce the building’s net lettable area from 4412 sqm to 4048sqm.

Working with the PDS team, JLL’s sustainability consultants established the additional cost required to bring the building to a zero carbon-ready status (Scenario 2).

Our debt experts established the cost of financing the upgrade, noting that many institutions offered competitive debt terms for projects with ambitious sustainability targets.

Our final analysis demonstrated that there would be high demand for zero carbon ready space in the short to mid-term future. The levered internal rate of return (IRR) over a six-year holding period achieved by refurbishing the building to zero-carbon status (scenario two), outweighed that of refurbishing to achieve a NABERS Energy rating of 5.5 stars (scenario one) by 6%. This is despite the initial cost variance of $2.6 million to achieve a zero carbon-ready building.

Scenario 2 achieved more attractive debt terms, rental premium and yield compression, driven by the demand for zero carbon-ready buildings Our client decided to sell the building in its current form and present our upgrade scenarios to potential buyers.

JLL’s capital markets team has an established network of global buyers for local assets. Having closed more than 360 deals between $50 million and $150m over the past four years, we were well-positioned to find the right buyer – one suited to take on the challenges and opportunities that this asset presented.

A successful sales campaign highlighted two trends shaping our cities.

The building was sold to a company which was directed by a ultra-high net worth offshore buyer that invests in and operates hotels. This was after attracting 23 private and institutional bidders through a competitive sales campaign and tapping into JLL’s network of potential investors.

Looking at the lease expiry profiles of Sydney CBD tenants, we found that of those with leases expiring in 2028 – accounting for 283,243 square metres of office space – 42% were committed to decarbonisation.

The conversion of offices-to-hotels is offering hotel owners and operators access to prime locations that were previously occupied by offices, quicker speed to market through retrofitting, and the opportunity to re-purpose under-utilised office space. It is important to note, that despite this, sustainability requirements such as those set by the City of Sydney in the case of York St, still apply.