Lend Lease shores up finance for Barangaroo
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.
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."