Buyers keen for apartments
Barangaroo's harbourside apartment towers are officially being offered to the public, off the plan, as the developer, Lend Lease, starts construction work on the residential component.
A memorandum of understanding authorising agents CBRE to respond to sales inquiries for the first two apartment buildings was signed on Tuesday.
According to the agents, demand is high for the apartments from a mix of Australian and overseas investors.
The residential towers are expected to be less controversial for the $6 billion project than the nearby planned "six-star" hotel and private casino.
On Monday, the owner of the Star casino at Pyrmont lodged a counter-bid to James Packer's proposal for a $1 billion casino and hotel at Barangaroo.
The two apartment buildings are along the Barangaroo waterfront and comprise 159 apartments, all with harbour views.
They vary in height from seven to 11 storeys and contain a mix of one, two and three-bedroom apartments, including 11 dual-level luxury loft apartments and one double-floor penthouse.
The northern building, designed by Richard Francis-Jones, includes a cloud-shaped design for the apartments and balconies at the north of the building, overlooking the new public square and harbour cove.
The southern building, designed by Andrew Andersons, includes substantial rooftop gardens and green plantings.
But property analysts have said that while the residential division is tipped to be keenly sought after, Lend Lease is still under pressure in the office component.
The team at Commonwealth Bank's global markets research said it appears Lend Lease "has made little progress on adding to the 71 per cent pre-commit at the office towers, known as C4 and C5".
These towers have been leased to Westpac, KPMG and Lend Lease at competitive rents.
"Therefore, contemplating demand, a third tower appears to be heavily reliant on at least PricewaterhouseCoopers signing," the analysts said. "Reports have suggested PWC, wanting 30,000 square metres, is looking at C3 but that would still leave 40,000 square metres to fill for the pre-commit.
"PWC's lease expiry at [Tower 2] Darling Park is at the end of 2015 but we understand it has a three-year option that is said to cost about $100 million. If Lend Lease pushed ahead with a third tower, we would imagine it may have to compensate PWC for some of the time it would leave on the table in its three-year option."
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free