This article is from the Australian Property Journal archive
LEND Lease has secured $2 billion including $1 billion from the Canada Pension Plan Investment Board for the development of the first two commercial towers at Barangaroo South.
Lend Lease has launched a new commercial wholesale open ended property trust and with the $2 billion raised, will fund and develop the first two towers.
CPPIB will anchor the fund, investing $A1 billion, whilst the Lend Lease managed Australian Prime Property Fund Commercial and two existing APPF Commercial investors, along with First State Super and Telstra Super have committed $500 million.
Lend Lease will invest up to 25% or $500 million in the fund as well. Lend Lease’s commitment will be funded from existing group cash, capital recycling and debt facilities.
Lend Lease CEO Steve McCann said the third tower can be undertaken in the trust and cornerstone investors have already expressed interest in investing further equity in the third tower.
“Lend Lease is delighted to be working in partnership with CPPIB and APPF Commercial and its investors to be delivering Sydney’s most sustainable high rise office towers.
“This is a significant project for Lend Lease and our securityholders. Our original bid assessment assumed only one commercial tower to be delivered in the first phase of the project, so we are very pleased to have secured leasing pre-commitments and funding for two towers,” he added.
“We will be able to gain a significant exposure in Sydney’s CBD through a premium-grade office development offering the tenants a highly efficient and environmentally sensitive environment. This investment supports our real estate strategy to acquire premium, long term assets in key global markets,” CPPIB real estate investments senior vice president Graeme Eadie said.
APPF Commercial fund manager John Dillon said the acquisition further strengthens APPF Commercial’s position as one of the country’s leading wholesale property investment funds, expanding its office portfolio interests to 13 properties, totalling more than 542,000 sqm, including other assets such as Darling Quarter and 1 O’Connell Street in Sydney and The Gauge in Melbourne.
APPF Commercial’s investment will initially be funded via existing debt facilities, with an equity raising of approximately $A200 million targeted for the second half 2012.
Property Review
