Lend Lease seals two Aussie exits involving APG and ADIA

The Sydney-based property developer-cum-fund manager has sold down part of its stake in the Barangaroo South Project in Sydney's central business district and 70 Eagle Street in Brisbane in deals valued at a combined A$323 million.

Lend Lease has sold A$323 million (€216 million; $300m) of property in a brace of transactions also involving large institutional investors APG Asset Management and Abu Dhabi Investment Authority (ADIA).

The Sydney-based property developer-cum-fund manager sold a 10 percent stake in the its Lend Lease International Towers Sydney Trust, a fund that manages the Barangaroo South Project in Sydney's central business district, for approximately A$200 million.

Meanwhile, it also sold 70 Eagle Street, an office in Brisbane better known as Central Plaza 3 to US-based property company Pembroke Real Estate for approximately A$123 million. It owned the building in a 50:50 joint venture with ADIA.

APG’s investment in the Lend Lease International Towers Sydney Trust sees the investo join several other institutions including the Canada Pension Plan Investment Board (CPPIB) and Australian superannuation funds First State Super and Telstra Super.

Its investment effectively reduces the holding of Lend Lease in the fund to 15 percent, reflecting an equity commitment of A$300 million.

CPPIB committed A$1 billion to the scheme in July 2012, its largest single real estate asset investment anywhere in the world up to that point.

Since then, Lend Lease has added a third office tower, to be called Tower 1, to the two originally planned, together called the International Towers Sydney (ITS).

“We were already ahead of where we expected to be at this stage of the evolution of the Barangaroo South precinct, with two towers 77 percent leased and under construction, and the first two apartment buildings sold,” Lend Lease chief executive Steve McCann said in the statement. “Tower 1 will complete the major commercial tower component.”

“ITS will be a world-class office development once completed and a showpiece for environmentally sustainable workplaces on a global scale,” Sachin Doshi, APG’s Asia-Pacific head of non-listed real estate, said in the statement. “This unique opportunity allows APG to gain a targeted exposure to one of the most prime central business district office assets in Australia and the Asia-Pacific region.”

Lend Lease also sold 70 Eagle Street in Brisbane, better known as Central Plaza 3, to US-based property company Pembroke Real Estate. Lend Lease first bought the asset alongside ADIA in 2007.

Lend Lease told PERE that the Central Plaza sale was a way for the company to take advantage of the current strength in Australia’s capital markets and recycle capital from one of its smaller investments from its A$1.8 billion Australian Prime Property Fund Commercial. “The sale allows APPF Commercial to reduce gearing and positions it to take advantage of other opportunities as they arise,” managing director of Lend Lease’s investment management business in Australia Kylie Rampa said.