Lend Lease sells 25% stake in Singapore commercial development for $189 million
Lend Lease has sold its 25% interest in the Jem mixed-use retail and office building in Singapore for S$227 million (around A$189 million) amid "softer" construction markets.
The 25% interest in the building has been divested into a newly created fund called the Lend Lease Jem Partners Fund.
The profitable sale was completed earlier than expected following the opening of the retail component of the project this weekend.
Jem (pictured below) is part of a larger Singapore government project - the Jurong East’s new town centre - being developed as the first “lifestyle hub” in West Singapore.
The development site where Jem is located was acquired in June 2010 via a joint venture between Lend Lease (25% ownership) and Lend Lease Asian Retail Investment Fund (ARIF) -75% ownership.
Over the last three years, Lend Lease has developed the site including the retail component of Jem, which opened 100% leased this past weekend (June 15).
“The Jem development is a tremendous example of our integrated business at work, bringing together an attractive project for our investors with design, delivery, development, leasing and asset management all delivered by Lend Lease.
“Strong investor interest enabled us to recycle our capital ahead of expectations and grow our funds under management in Asia,” said Lend Lease chief executive, Steve McCann.
The sale of the direct stake in Jem will lead to another strong result for Lend Lease’s Asian operations in the 2013 financial year, he added.
It will also lower Lend Lease’s effective tax rate for the 2013 financial year.
Lend Lease said that its Asian development, Australian infrastructure development and Australian property businesses were performing better than the prior year.
However, it said the underlying construction markets in Australia and EMEA (Europe, Middle East and Africa) “have softened in the second half of the 2013 financial year, “contributing to reduced earnings from the construction businesses in those regions”.