Lendlease fortifies Singapore connection

Global building and development giant Lendlease is preparing to launch a Singapore-based real estate investment trust.

LendLease CEO Steve McCann. Picture: John Feder

Global building and development giant Lendlease is preparing to launch a Singapore-based real estate investment trust likely to hold some of its key shopping centres across Asia and beyond, and likely to have a market capitalisation of more than $1 billion.

The move marks a major step for the group’s funds management unit, which controls a $34bn empire globally, into the listed sector as the company normally draws most of its backing from global pension funds.

The fund, flagged in reports by International Financing Review Asia, could grow to hold a major slice of the company’s global retail assets in coming years if launched as planned.

A $US500 million ($700m) raising was mooted by the publication but fund managers said a larger vehicle could be sustained as Singapore-listed stocks with cross-border holdings were in demand from global investors.

The play is timed to capitalise on a surge in regional real estate investment trust markets where new products have been launched that hold US and European properties.

It comes as the company’s development and funds units step up their activities while Lendlease looks to exit its loss-making engineering division that is being readied for sale after incurring heavy losses last year.

A Singapore listing could also help refresh Lendlease’s balance sheet without tapping the local market where its share price remains depressed.

Floating a trust would allow Lendlease to capitalise on its global expertise in retail property development, management and funds.

Lendlease has a long history of developing major retail assets in Singapore and globally, having developed landmarks including Britain’s Bluewater Shopping Centre.

The group’s unlisted Asian Retail Investment Fund set up in 2007 controls key retail assets, primarily in the Singapore retail market. It owns interests in two assets in Singapore and one in Malaysia.

The group also set up Lendlease Jem Partners in 2013 as wholesale investment vehicle, which holds an interest in Jem, a suburban retail and office asset in Singapore.

Jem is one of Singapore’s largest suburban malls, located in Jurong East, and houses more than 200 stores over 50,000sq m of retail space across six levels.

The group also has the Parkway Parade Partnership, an open-ended wholesale fund, that controls Singapore’s Parkway Parade.

Lendlease is also finishing off the Singapore’s Paya Lebar Quarter, a flagship precinct of three office towers, luxury apartments and a major retail component. It is undertaking the project with the Abu Dhabi Investment Authority and elements of it could suit the fund.

The company declined to comment about its plans or which assets could be involved.