Lend Lease raises $556m fund to own Asian shops

Lend Lease raises $556m fund to own Asian shops
Email Print Normal font Large font Carolyn Cummins Commercial Property Editor
May 24, 2007

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AdvertisementGLOBAL property group Lend Lease has strengthened its wholesale funds business with the completion of a $S700 million ($556 million) capital raising to fund its new Asian Retail Investment Fund.

Overall, ARIF has raised $S325 million through its second and final offer, adding to the $S375 million raised in December.

The group launched ARIF last November through its investment management business to help drive a $1.1 billion shopping centre development in Singapore.

The seed asset was a 75 per cent stake in the Somerset Central shopping centre on Singapore's premier Orchard Road shopping strip worth $S617.2 million.

ARIF bought the stake from Lend Lease, which has retained 25 per cent but may sell a further 15 per cent to the fund.

Lend Lease chief executive Greg Clarke has made no secret that the group wants to radically beef up its investment management division, which delivered a 46 per cent growth in funds under management to $10.2 billion for the six months to December 31, 2006.

There are now five funds under the investment management umbrella, which is run by finance director Steve McCann.

In February this year, at the group's half-year result, Mr McCann said it was planning to add more to the cache including a vehicle that could buy some of Lend Lease's United Kingdom retail assets.

This could include the group's 30 per cent stake in the Bluewater complex in Kent.

Lend Lease is also exploring the option of creating a residential fund worth as much as £1.5 billion ($3.6 billion) to take over the housing component of the 2012 London Olympic village that it is building.

Earlier this year, Mr McCann said: "With the ARIF launched during the half, we have begun to add to our offer in South-East Asia and, given the number of projects in the group's UK development pipeline, we plan to launch new funds."

In addition to Singapore the group will target assets in Taiwan, Malaysia and Thailand.

Wholesale funds have become the next phase for listed property groups, whereby they can retain a portion of direct ownership as well as generating fees through its management of the fund.

Lend Lease has forecast a profit of about $399 million for the year to June 30, compared with $354.2 million for 2005-06.

Property analysts at Macquarie Equities said Lend Lease has the potential to undergo further re-ratings.