CPP Investment Board

CPP Investment Board

July 08, 2012 18:39 ET

Canada Pension Plan Investment Board to Develop Landmark Office Towers in Sydney's Central Business District

Joint Venture with Lend Lease and Australian Prime Property Fund Commercial

SYDNEY, AUSTRALIA and TORONTO, ONTARIO--(Marketwire - July 8, 2012) - Canada Pension Plan Investment Board (CPPIB) announced today that it has formed a joint venture with Lend Lease Corporation and the Australian Prime Property Fund Commercial (APPFC) to develop and hold two institutional quality, premium grade, energy-efficient waterfront office towers at the Barangaroo South Project in Sydney's Central Business District (CBD) in Australia.

The joint venture is committing A$2 billion (C$2.08 billion) with CPPIB committing 50% or A$1 billion (C$1.04 billion) of the equity for the project. Lend Lease and APPFC will each commit 25% to the joint venture.

The Barangaroo South Project will be CPPIB's first direct office investment in Australia and its largest investment in a single real estate asset to date.

"This is an excellent opportunity to invest in a high quality, iconic commercial waterfront real estate development alongside Lend Lease, one of the region's top developers and APPFC, an aligned, local institutional partner," said Graeme Eadie, Senior Vice-President, Real Estate Investments for CPPIB. "We will be able to gain a significant exposure in Sydney's Central Business District through a premium-grade office development offering the tenants highly efficient and environmentally sensitive facilities. This investment supports our real estate strategy to acquire premium, long term assets in key global markets."

"Lend Lease is delighted to be working in partnership with CPPIB and APPF Commercial and its investors to be delivering Sydney's most sustainable high rise office towers," said Steve McCann, Group Chief Executive Officer and Managing Director, Lend Lease. "Barangaroo South demonstrates Lend Lease's ability to provide access to high quality scarce development opportunities to its institutional investment partners. We thank our investors for their support and funding and look forward to a long and successful relationship on this flagship project."

The joint venture investment in the Barangaroo South Project, which is part of a major new extension of the Sydney CBD, involves the development of two premium-grade office towers of 41 floors and 38 floors totalling 165,773 square metres (1.78 million square feet). The two towers will offer a retail component comprising 6,840 square metres (73,625 square feet) of retail space. Completion of both towers is expected in 2015. Under certain circumstances, the joint venture may also develop a third tower at Barangaroo South in the future.

"Our comparative advantages, especially our long-term investment horizon and real estate expertise, enable us to deploy capital in complex transactions such as this one," said Mr. Eadie. "CPPIB is one of only a few global institutional investors able to complete a transaction of this scope."

Lend Lease is Australia's market leading project developer and asset manager; APPFC is a leading wholesale investment vehicle managed by Lend Lease.

At March 31, 2012, CPPIB's real estate portfolio totaled C$17.1 billion of which approximately C$1.7 billion was invested in Australia.

About Canada Pension Plan Investment Board

Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At March 31, 2012, the CPP Fund totalled $161.6 billion. For more information, please visit www.cppib.ca.

About Lend Lease

Lend Lease is a leading and international property and infrastructure group, with a focus on core markets in Australia, Asia, Europe and the Americas. Listed on the Australian Securities Exchange and with circa 17,000 employees, Lend Lease's capabilities span the property value chain and include development management; investment management; project management & construction and asset & property management. Our expertise covers multiple sectors including commercial, residential, retail, retirement and infrastructure.

We create innovative and sustainable property solutions, forging partnerships and delivering maximum benefits to clients, investors and communities. Safety is our number one priority and Lend Lease is committed to operating Incident & Injury Free wherever we have a presence. Sustainability has always been an integral part of our culture and through design and investment in new technologies, we are delivering the next generation of sustainable property solutions.

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