The Canada Pension Plan Investment Board (CPPIB) announced that it will invest A$1 billion to support development within Sydney’s CBD.
Working in a joint venture with Lend Lease Corporation and the Australian Prime Property Fund Commercial (APPFC) CPPIB will 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.
Tenancy agreements have been signed with Westpac Banking Corporation and KPMG to lease over 70 per cent of space in the precinct, a former port terminal, where Lend Lease plans to create a new financial hub for the city after it began work on the $6 billion redevelopment project late last year. The 22-hectare site will contain 300,000 square metres of commercial floor space. 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.
"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," 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 project represents the CPP's single biggest real estate investment to date and its first direct office development within Australia.”
Graeme Eadie, Senior Vice-President, Real Estate Investments for CPPIB said, "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. 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."
As at March 31, 2012, CPPIB's real estate portfolio amounted to C$17.1 billion of which approximately C$1.7 billion was invested in Australia.