Westpac and KPMG to take up more than 70% in two of Lend Lease’s Barangaroo South towers

Two out of the three commercial towers to be built at Lend Lease’s $6 billion Barangaroo South Sydney CBD harbourside project are more than 70% leased following agreements with Westpac and KPMG. 

Westpac has entered into an agreement with Lend Lease to take approximately 70% of the commercial floor space in the first tower to be constructed at development site. 

The bank will take 60,000 square metres in the Barangaroo building currently known as “C4” and expects to occupy the building from 2015. 

Lend Lease has also entered into a lease agreement with accounting firm KPMG in the second tower, which is conditional on funding, which combined with Lend Lease’s own commitment to move its offices to the second tower will take up over 75% of commercial floor space. 

KPMG currently leases about 28,000 square metres in the KPMG Centre at 10 Shelley Street at King Street Wharf. 

KPMG is also expected to commence its move into the second tower in 2015. 

The lease agreements, which cover over 120,000 square metres of office space, represent Australia’s largest ever commercial leasing commitment for a single development. 

The lease agreements were foreshadowed by the Sydney Morning Herald’s Carolyn Cummins in September 2010. 

Westpac currently has offices in nine sites across Sydney’s CBD, and the new site will enable the group to consolidate into two locations – its existing head office at 275 Kent Street and the new Barangaroo building. 

The bank also announced that Lend Lease has agreed to purchase two Westpac-owned buildings at 182 George Street and 33-35 Pitt Street. 

"Bringing our Sydney CBD teams together in the landmark Barangaroo development and our nearby Westpac Place headquarters will enable our employees to benefit from an attractive, highly efficient and collaborative working environment in a vibrant financial services centre,” says Westpac CEO Gail Kelly. 

“This development will also be Australia's first large-scale carbon neutral community, which is important to Westpac given our position as a global leader in sustainability,” says Kelly. 

Commenting on the lease agreements, Lend Lease Group CEO and managing director Steve McCann says its ability to attract leading tenants like Westpac and KPMG “reflects the quality of what we are building at Barangaroo South”. 

“Today we have announced Australia’s largest ever commercial leasing commitment for a single development. 

“Our original assessment required only one commercial tower to be delivered in the first phase of the project, so we are very pleased to have leased two towers concurrently. 

“We are currently in detailed discussions with capital partners for the funding and development of the commercial towers at Barangaroo South. 

“The investors are engaged in exclusive due diligence before entering into binding commitments. In line with the Group’s strategy of investing alongside capital partners, Lend Lease intends to invest 25% of the equity in the first two towers.” 

“Construction works at Barangaroo South continue to progress well with the perimeter retention wall now complete and piling for the first commercial tower underway,” says McCann.

Barangaroo South will have about 330,000 square metres of office space upon completion.

There are plans for three commercial building known as C3 (49 storeys), C4 (42 storeys) and C5 (39 storeys), which are due to be completed in 2015 and 2016.

Colliers International alongside Jones Lang LaSalle and DTZ Australia have been appointed to assist Lend Lease on managing tenant interest and leasing at Barangaroo. 

DTZ international director of leasing John Hickey says demand from tenants has been incredibly strong and that pre-commitment leasing announcements and recent development approvals “will give a shot in the arm to the Sydney office leasing market”. 

Jones Lang LaSalle’s Australian head of leasing Kevin George says momentum in the Sydney office leasing market will now build following more certainty around the delivery of space in the 2015 timeframe, when Barangaroo South is completed. 

“We expect a surge of activity from medium to smaller tenants now that it is known who the anchor tenants for the first two towers of the development will be,” he says. 

“The interest in the Barangaroo development since the bid phase has been exceptional and we expect the completion in 2015 will coincide with an uptick in the financial services sector. 

Deloitte Access Economics projects that the finance and insurance sector in the Sydney CBD will grow by 1.9% in 2014 and 3.8% in 2015. 

“Already there are about 170,000 people employed in NSW’s finance and insurance services sector, representing over 40% of that industry in Australia,” says George. Mark Lacey, national director of office leasing at Colliers International, describes Barangaroo as a unique project combining a CBD location with parklands and waterfront access. 

“The compelling reasons why organisations will locate to Barangaroo are the large floor plates, the sustainability features of the precinct, the incredible amount of amenity that is being created for staff including retail and leisure activities around the waterfront and the new transport connections,” he says. 

“Tenants at Barangaroo will benefit in a way that is not possible elsewhere in the Sydney CBD by having this amenity on the doorstep of their work environment.”