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One of the biggest sovereign wealth funds, the Abu Dhabi Investment Authority, will take a $280million stake in Lend Lease’s new office tower project, Darling Walk, on the edge of the Sydney CBD as it expands its Australian property portfolio.
Lend Lease signed off this week on deals with the Commonwealth Bank -- which will lease nearly all of the buildings’ 58,000sqm of office space -- and with the Sydney Harbour Foreshore Authority allowing the redevelopment of the 1.5ha site at the southern end of Darling Harbour.
The Commonwealth Bank will move out of 12 Sydney office buildings after taking a 13-year lease over 53,000sqm of Lend Lease’s new $560million Darling Walk project in one of the country’s biggest leasing deals.
The bank’s lease, an open secret for a good part of this year, will result in 4500 bank staff moving into the two nine-storey towers on the building’s completion in late 2011.
Lend Lease development director David Hutton said the group was appointed preferred developer late last year for the former Sega World site, which it leased from the foreshore authority for 99years.
Lend Lease said its wholesale property trust, Australian Prime Property Fund Commercial, and an "offshore institutional investment partner" would jointly finance and acquire Darling Walk. Lend Lease declined to comment on the identity of its joint venture partner, while ADIA could not be reached yesterday.
ADIA, with assets estimated at more than $US650 billion ($800 billion), took a $US7.5billion stake in Citigroup earlier this year,
In Australia, ADIA and Lend Lease’s APPF jointly own 1 O’Connell Street in Sydney and last year were understood to have again teamed to buy Central Plaza Two and Three office towers in Brisbane for $454.2 million.
It was reported to be GPT’s joint venture partner on its $500million 111 Eagle Street tower in Brisbane.
Earlier this year, ADIA bought a small stake in Australian-based construction giant Leighton Holdings. In January, it paid about $156million for a 19.9 per cent stake in the AMP New Zealand Office Trust.
The Darling Walk project includes 58,000sqm of office space, a retail precinct, theatre, community green, water park and underground car park.
Project management, design management and construction of the 65,000sqm development, which is to include two nine-storey office towers, will be undertaken by subsidiaries Bovis Lend Lease and Lend Lease Development.
Lend Lease Investment Management will act as investment manager for both owners.
Lend Lease said demolition of existing structures would begin immediately, with construction of the new precinct starting once planning approvals were finalised early next year.
The building is being designed architect FJMT and DTZ is the leasing agent.
DTZ office leasing director John Hickey said in economic terms, the Commonwealth Bank lease was probably the single largest office leasing deal ever done in Australia.
A bank spokesman declined to comment on rent or incentives struck for Darling Walk, but said the bank would relinquish leases at 52 Martin Place, 39 Martin Place, 363 George Street and 175 Pitt Street and other Sydney locations.
The bank is also leasing the nearby Darling Park 1 as its main office housing its premium business services and retail banking services businesses and support functions.
Darling Walk will house the bank’s wealth management teams from 52 Martin Place, and enterprise IT teams.
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