Lend Lease wins $1 billion Darling Harbour project over Macquarie and Multiplex rival consortia

Lend Lease has been selected as preferred bidder by the New South Wales government to deliver the Sydney International Convention, Exhibition and Entertainment Precinct (SICEEP) at Darling Harbour.

It's among the winning Destination Sydney consortium consisting of Lend Lease, HOSTPLUS, Capella Capital, AEG Ogden and Spotless.

The two losing bidders were Key Partners comprising Laing O'Rourke Australia Construction Ltd, John Laing Investments Ltd, Macquarie Capital Group Ltd, GL Events and Honeywell Ltd; and the VeNuSW consortia comprising Plenary Group Ltd, Brookfield Multiplex P/L, Brookfield Multiplex Services Pty Ltd and Suntec Int. Convention & Exhibition Services Pte Ltd.

Lend Lease and Destination Sydney will work with Infrastructure NSW (INSW) to enter into a $1 billion public private partnership to design, construct, finance, maintain and operate the convention, exhibition and entertainment facilities.

The state government had concluded the existing facilities at Darling Harbour have served Sydney well since the 1980s and been the backbone of the growth in the major events industry.

"However, Sydney needs to respond to the substantial improvement in the standard of equivalent facilities in Australia and the Asia-Pacific if the city is to realise its full potential in the convention and exhibition markets," the government says.

The project aims to revitalise the 20-hectare precinct that runs north-south from Haymarket through to Cockle Bay, and east-west from the CBD to Ultimo.

The project's commitments are fully underwritten, and Lend Lease will invest 50% of the equity alongside the national industry super fund for tourism and hospitality, HOSTPLUS, with debt being provided by a syndicate of local and overseas banks.

Lend Lease, which has the nearby Bangaraoo project, will also work with INSW to enter into project development agreements to develop a mixed-use site of approximately five hectares adjacent to the SICEEP site with an anticipated end development value in excess of $1.5 billion.

The mixed-use site includes a landmark hotel of up to 900 rooms and approximately 1,400 residential apartments, 23,000 square metres of student accommodation, 7,000 square metres of retail, 15,000 square metres of commercial space, a 400-bay public car park, and up to 2,000 square metres of community space and public realm upgrades.

Lend Lease Group chief Steve McCann, said the commencement of site works was scheduled for December 2013. 

The existing Sydney Convention & Exhibition Centre will close December 2013. The new facilities and the improved public spaces at Darling Harbour will be opened in December 2016. Construction will commence on The Haymarket in 2014, allowing the existing Sydney Entertainment Centre to remain open until December 2015.

Premier Barry O’Farrell said today the transformation of a 20-hectare precinct at Darling Harbour would generate about $5 billion in economic benefit for NSW.

Click for the preferred consortia details.