LEND LEASE is looking to start pre-sales of the residential tower at the $6 billion Barangaroo South development within the next two years, after securing funding for the project.
Aside from the three office towers, casino and hotel, there are about 775 to 800 planned apartments on the site that could each have an asking price of $1 million-plus.
After lengthy negotiations, the group revealed that NSW government superannuants in First State Super and the Telstra Super fund are to be direct financiers of the $2 billion Barangaroo South project.
The two funds are included in the syndicate, along with the Lend Lease-managed Australian Prime Property Fund Commercial, which will take a combined $500 million stake in the construction of the development. The Canada Pension Plan Investment Board will invest $1 billion and Lend Lease will make up the remaining $500 million, which will be funded by internal cash flow.
Westpac, KPMG and Lend Lease are the confirmed anchor tenants for the first two office towers at an average rental of $1000 per square metre. Of that gross rental, 20 per cent will be made up of incentives, such as free office fit-out, rent-free periods or free car parking.
It is widely speculated that the accounting firm PricewaterhouseCoopers could take anchor space for the planned third tower.
The Lend Lease chief executive, Steve McCann, said yesterday the group had finalised the commercial component so, "we will now turn our mind to the residential".
"The main game now is the execution of the commercial, and then we will be launching the residential to the market. Expect the first pre-sales in the next two years," he said.
He also confirmed the proposed hotel and casino were still subject to discussions with the state government. "When the NSW government requested us to relocate the hotel from the water to the land, we agreed to enter into negotiations," Mr McCann said.
"One key driver was we had to retain the quality, which was expected to be delivered, and another was it couldn't impact on the timing of the commercial precinct, and third, it would leave LLC [Lend Lease] whole from a commercial perspective.
"Having announced the funding of the commercial towers we can focus more on the hotel. So those discussions in the next few months will become more detailed and I hope we will resolve location issues in the next quarter."
Frequently Asked Questions about this Article…
Who is financing Lend Lease's $2 billion Barangaroo South commercial development?
The commercial funding syndicate includes the Canada Pension Plan Investment Board investing $1 billion, a group of investors (including NSW superannuants First State Super, Telstra Super and the Lend Lease‑managed Australian Prime Property Fund Commercial) taking a combined $500 million stake, and Lend Lease providing the remaining $500 million funded from its internal cash flow.
How much is Lend Lease investing in Barangaroo South and how will it be funded?
Lend Lease will contribute $500 million toward the $2 billion commercial project, and the company says that amount will be financed from its internal cash flow.
When will pre‑sales for the Barangaroo South residential tower start?
Lend Lease expects to launch pre‑sales for the residential tower within the next two years, once the commercial component is executed.
How many apartments are planned at Barangaroo South and what prices can buyers expect?
About 775 to 800 apartments are planned across the site, and each could have an asking price of $1 million or more according to the project details.
Who are the confirmed anchor tenants for the first office towers and what rent and incentives apply?
Westpac, KPMG and Lend Lease are confirmed as anchor tenants for the first two office towers at an average rental of $1,000 per square metre. Around 20% of that gross rental will be made up of incentives such as free office fit‑outs, rent‑free periods or free car parking.
Is PricewaterhouseCoopers confirmed as an anchor tenant for the third tower?
No—PricewaterhouseCoopers is widely speculated to be a potential anchor tenant for the planned third tower, but that was not confirmed in the report.
What is the current status of the proposed hotel and casino at Barangaroo South?
The hotel and casino proposals remain subject to discussions with the NSW government. The government requested relocating the hotel from the water to the land, and Lend Lease says more detailed negotiations will take place over the next few months with hopes of resolving location issues within the next quarter.
What are Lend Lease's next steps for Barangaroo South after securing commercial funding?
With funding for the commercial towers finalised, Lend Lease plans to focus on executing the commercial precinct first and then launch the residential offering to the market, with first pre‑sales expected in the next two years.
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