Ravi Chandran
GIC, Singapore’s sovereign wealth fund, will acquire a 25.1% stake in Lendlease International Towers Sydney Trust (LLITST) from Canada Pension Plan Investment Board and Lendlease.
LLITST holds assets located in the Barangaroo Office Precinct in the Sydney Central Business District (CBD). The properties are highly-accessible premium grade office towers, with close proximity to Darling Harbour and extensive amenities.
Lee Kok Sun, Chief Investment Officer, GIC Real Estate, said, “These high-quality assets, situated in the heart of Sydney’s CBD, are expected to generate attractive risk-adjusted returns in the long run. As a long-term investor, we will continue to seek good investment opportunities that will add value to our global portfolio.”
The transaction is subject to regulatory approval and expected to fully close in Q3 2019.
LLITST is a A$4.3 billion trust, established in 2012. It holds a 100 per cent interest in the first two commercial towers constructed by Lendlease at Barangaroo South, being International Towers Sydney – Tower Two and International Towers Sydney – Tower Three. The Fund also holds a 100% interest in Australia’s first engineered timber office, International House Sydney at Barangaroo South and the Towns Place Car Park.
Lendlease announced in 2015 that it has launched a new commercial wholesale open-ended property fund to invest in the circa $2 billion commercial Tower 1 at Barangaroo South.
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Lend Lease One International Towers Sydney Trust is the second fund established to invest in the precinct and will be managed by Lend Lease’s Investment Management business. Construction of the third and largest commercial tower, known as Tower 1, commenced in April 2014.
The fund acquired 100% of Tower 1 with circa $1.4 billion of equity commitments from capital partners and circa $600 million of debt financing. The Qatar Investment Authority (QIA) has committed to a 37.5% investment and the Lend Lease managed Australian Prime Property Fund Commercial (APPF Commercial) has committed to a 25% investment.
Consistent with its strategy of investing alongside capital partners, Lend Lease will hold the remaining 37.5%, as a co-investor. Commitments to the fund will be drawn to around 25% on establishment (expected to be received in the first quarter of FY16), followed by a series of fixed periodic instalments.
Lendlease in 2015 signed leasing arrangements with Marsh & McLennan Companies and Servcorp to occupy Tower 1 at Barangaroo South, with Marsh & McLennan Companies entering into an Agreement for Lease for approximately 10,400 sqm (4.5 floors) of commercial floor space and Servcorp entering into an Agreement for Lease for approximately 2,300 sqm (1 floor) in the building, together with existing tenants in Tower 1, PwC and HSBC.
The towers are developed and constructed by Lendlease to a Premium grade standard, offering tenants leading environmental credentials.
Each tower is designed to take advantage of the outstanding harbour-front location, to achieve 6 Star Green Star Design ratings and target 5 Star NABERS Energy and Water ratings.
- Tower Two is a 89,200 square metre premium grade office tower, with 41 levels.
- Tower Three is a Premium grade, 38-level office tower of 82,000 square metres.
International House Sydney is a sustainable office building with 7,500 square metres NLA across six levels of office and one of retail. The asset has been constructed from Cross Laminated Timber (CLT) and glue laminated timber (Glulam), which hold lower carbon footprints than other building materials. The production process produces zero waste and the timbers are sourced from certified sustainably managed forests.
Wynyard Walk pedestrian connection opened in September 2016, providing a direct pedestrian link between Wynyard and Barangaroo.
Barangaroo South is an urban regeneration project located on the last major waterfront site in the Sydney central business district (CBD). When complete, it will include three major office buildings, 800 residential apartments and a world class hotel situated next to waterfront parklands.
RESPONSIBLE PROPERTY INVESTMENT
LLITST has a vision to be recognised as the global leader in responsible property investment. It acknowledges the sustainability aspirations of the broader Lendlease Group and is aligned with Lendlease’s key sustainability objectives.
The Fund has had a Responsible Property Investment strategy in place since 2016.
GLOBAL REAL ESTATE SUSTAINABILITY BENCHMARK (GRESB)
LLITST has participated in the Global Real Estate Sustainability Benchmark (GRESB) assessment since 2014.
In 2018, the Fund participated in the main GRESB real estate assessment and achieved a score of 98 out of 100, ranking second globally out of 874 participants and second in the global office sector across listed and unlisted funds.
It is the first year that LLITST has participated in the GRESB real estate category – previously it participated developer assessment category, which the Fund had achieved a first ranking for 4 consecutive years.
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