Work is set to start later this year on the largest of three office towers in Australia’s largest commercial development following the finalisation of leasing arrangements with major tenants for the building.

In a statement on Wednesday, Barangaroo South developer Lend Lease said it had reached agreements with PricewaterhouseCoopers and HSBC to take twelve floors (26,500sqm) and 3.5 floors (8,000sqm) respectively of space within the 49 storey Tower 1 of International Towers Sydney.

The company also announced it had sold a 10 percent stake in the trust which owns the towers to international pension fund APG for $200 million (subject to conditions), reducing its stake from 25 percent to 15 percent and its overall commitment to the trust from $500 million to $300 million.

Designed by internationally acclaimed architect Lord Richard Rogers, the new building will be the largest of three commercial towers on the Barangaroo South site, which forms the residential and commercial hub of the overall 22 hectare Barangaroo development and will also include around 800 apartments in eight mixed high-rise and low rise multi-residential buildings, a new international hotel, shops, cafes and bars and 3.6 hectares of public space including a new cultural building, waterfront square and harbourside walkways.

Key features include large floor plates which offer flexibility and efficiency, high ceilings (2.9m standard) and interconnected floors and communal areas to promote collaboration, whilst the building is designed to be carbon neutral, maximise natural daylight and achieve 5 Star NABERS Energy Rating and a 6 Star Green Star Design (As Built rating v3).

Construction is expected to commence in the second half of this year and finish in 2016/17.

Lend Lease Group Chief Executive Officer and Managing Director Steve McCann welcomed the latest announcements, which he said illustrated quality tenant demand for productive and sustainable workplaces.

“Prior to today’s announcement, we were already ahead of where we expected to be at this stage of the evolution of the Barangaroo South precinct, with two towers 77 percent leased and under construction and the first two apartment buildings sold,” McCann said.

“Tower 1 will complete the major commercial tower component.”

The latest news follows a major disruption in the building of Tower 2 last month as a result of a fire in the eastern corner of the site – an event which caused substantial friction between Lend Lease and the Construction, Forestry, Mining and Energy Union.

Around 650 workers are engaged on Tower 2, the core of which has now reached Level 17 and the outside shell of which is soon to take shape.