CPPIB to Develop Office Towers in Sydney

According to the press release, “Canada Pension Plan Investment Board (CPPIB) announced today that it has formed a joint venture with Lend Lease Corporation and the Australian Prime Property Fund Commercial (APPFC) to develop and hold two institutional quality, premium grade, energy-efficient waterfront office towers at the Barangaroo South Project in Sydney’s Central Business District (CBD) in Australia.

The joint venture is committing A$2 billion (C$2.08 billion) with CPPIB committing 50% or A$1 billion (C$1.04 billion) of the equity for the project. Lend Lease and APPFC will each commit 25% to the joint venture.

The Barangaroo South Project will be CPPIB’s first direct office investment in Australia and its largest investment in a single real estate asset to date.

“This is an excellent opportunity to invest in a high quality, iconic commercial waterfront real estate development alongside Lend Lease, one of the region’s top developers and APPFC, an aligned, local institutional partner,” said Graeme Eadie, Senior Vice-President, Real Estate Investments for CPPIB. “We will be able to gain a significant exposure in Sydney’s Central Business District through a premium-grade office development offering the tenants highly efficient and environmentally sensitive facilities. This investment supports our real estate strategy to acquire premium, long term assets in key global markets.”

“Lend Lease is delighted to be working in partnership with CPPIB and APPFC and its investors to be delivering Sydney’s most sustainable high rise office towers,” said Steve McCann, Group Chief Executive Officer and Managing Director, Lend Lease. “Barangaroo South demonstrates Lend Lease’s ability to provide access to high quality scarce development opportunities to its institutional investment partners. We thank our investors for their support and funding and look forward to a long and successful relationship on this flagship project.”

The joint venture investment in the Barangaroo South Project, which is part of a major new extension of the Sydney CBD, involves the development of two premium-grade office towers of 41 floors and 38 floors totalling 165,773 square metres (1.78 million square feet). The two towers will offer a retail component comprising 6,840 square metres (73,625 square feet) of retail space. Completion of both towers is expected in 2015. Under certain circumstances, the joint venture may also develop a third tower at Barangaroo South in the future.”

Read more: Press Release

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