Singapore’s sovereign wealth fund GIC is acquiring a 25.1% stake in a A$4.3bn (€2.6bn) Sydney office fund from Canada Pension Plan Investment Board (CPPIB) and Lendlease.
IPE Real Assets understands that GIC has paid just over A$1bn in total to buy a 14% stake in the Lendlease International Towers Sydney Trust (LLITST) from CPPIB, with the balance of 11.1% coming from Sydney-based global property group Lendlease.
LLITST owns International Tower Two and International Tower Three along with the six-storey, International House Sydney, Australia’s first engineered timber highrise building at Barangaroo South, a massive redevelopment on Sydney’s harbour foreshores.
GIC’s chief investment officer, Lee Kok Sun, 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.“
Lee added: “As a long-term investor, we will continue to seek good investment opportunities that will add value to our global portfolio.”
Lendlease and CPPIB put their stakes on the market in February this year.
In a recent interview with IPE Real Assets, CPPIB’s head of real estate investment Asia, Jimmy Phua, said CPPIB would sell assets if it was a good time to sell because, as an example, the market had reached a certain level.
CPPIB entered the project when it was just coming out of the ground, in 2010, in an A$1bn forward-funding arrangement with Lendlease.
Lendlease is freeing up cash to alleviate pressure on its balance sheet as it deals with write-downs on its engineering business, which is in the throes of being sold.
The trust was set up in 2012, having attracted capital partners including the Hong Kong Monetary Authority, Qatar Investment Authority, APG, Australia’s First State Super and Lendlease’s own flagship wholesale fund, APPF Commercial.