Lend Lease finalise $2 billion funding deal at Barangaroo

ASX-listed Australian property and construction firm Lend Lease have all but secured the delivery of the first two commercial towers in the $6 billion Barangaroo development on Sydney Harbour.

The $2 billion commitment comprises $1 billion from Canadian Pension Plan Investment Board which invests on behalf of the country's state retirement plans.

$500 million will come from Lend Lease's own Australian Prime Property Fund Commercial (APPFC) with Telstra Super and independent retirement fund First State Super to provide the remainder of the money.

''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,'' Canada Pension Plan's senior vice-president for real estate investments Graeme Eadie said.

The significant deal follows

last month's announcement that Lend Lease had secured Westpac, KPMG and itself to occupy 70% of the first two towers.

Lend Lease also confirmed that the major leasing deals were committed in line with market expectations of $1,000 per square metre.

Average incentives were confirmed at approximately 20%.

The focus now turns to a third commercial tower, hotel and residential towers.

Lend Lease chief Steve McCann confirmed that media and gaming billionaire James Packer is one of the parties interested in acquiring the hotel right.

"They (Crown) have made it clear that they are interested and the government seems to be supportive of their potential proposition to get a second (casino) licence. But we will be talking to a number of people to see how that plays out before a decision is made."

It is also understood the marketing of the 800 proposed luxury residential apartments could be brought forward to a 2014/2015 launch.