Lend Lease secures A$2 billion funding for Barangaroo towers
SYDNEY (Reuters) - Australia's Lend Lease (LLC.AX: Quote) said it had secured A$2 billion funding for the first two commercial towers at its flagship waterfront Barangaroo South project, with A$1 billion committed by Canada Pension Plan Investment Board.
Other investors include the Lend Lease managed Australian Prime Property Fund Commercial (APPF Commercial) and two APPF Commercial investors, which have committed a combined A$500 million, Lend Lease said.
Lend Lease, a property developer, will also invest up to 25 percent, or A$500 million, in the first two towers and its commitment will be funded from existing group cash, capital recycling and debt facilities.
"Our original bid assessment assumed only one commercial tower to be delivered in the first phase of the project, so we are very pleased to have secured leasing pre-commitments and funding for two towers," Steven McCann, Lend Lease's group CEO, said in a statement issued on Saturday.
He also said that investors have expressed interest in investing further equity in the third tower.
The announcement comes as Westpac Banking Corp (WBC.AX: Quote) has entered into an agreement for a lease to take about 70 percent of the commercial floor space in the first tower, and accounting firm KPMG and Lend Lease will together occupy 75 percent of the second tower.
Lend Lease this month said its year to June 2012 operational profit after tax was expected at A$485 million to A$505 million ($491 million to $518 million), beating market expectations for a fall, as it exits non-core businesses and moves away from lower-yield property assets.
The company also said the estimates did not include any profits from the Barangaroo South project.
Canada Pension Plan Investment Board (CPPIB) has been actively investing in Australia. As of March 2012, CPPIB's real estate portfolio totaled C$17.1 billion ($17.4 billion) of which about C$1.7 billion was invested in Australia.
(Reporting by Eriko Amaha; Editing by Ron Popeski)
© Thomson Reuters 2017 All rights reserved.