In general, upgrades are risky as they are not automatic and you would need to have high status with an airline to be successful. As such, I’d say an outright redemption makes most sense.
Singapore Airlines is a good bet, given it will be about 160,000 Krisflyer points return in business from Sydney to London; however, the taxes are very high (~$900). June is a very busy time to travel and you’ve left it quite late, but there are a couple of days of business available in June (e.g. 8 June with a long Singapore stopover). It takes one business day for points to transfer from AMEX to Krisflyer. I would also make sure you look at flying to other European cities, and then getting a separate flight to London. In particular, under the Singapore award chart, flying in to Amsterdam, Athens, Copenhagen or Rome would cost 30,000 less points than London, Barcelona, Frankfurt, Paris etc.
Alternatively, you can use Velocity points for redemptions on Etihad as they are partners, so you’d be able to combine those with your existing points. There are some guides on Point Hacks about how this works, so you should track those down and have a look. I think it’d be about 250,000 Velocity points return, but I am not entirely sure. You can search Etihad availability here: etihad.com/en-us/plan-and-book/book-redemption-flights/