The manager of Lendlease Global Commercial REIT (LREIT) today announced that the REIT has acquired a stake in Jem at a purchase consideration of $45 million.
RBC Investor Services Trust, the trustee of LREIT on Oct 1, entered into a share purchase agreement (SPA) with Lendlease International to acquire a 5.0% stake in Lendlease Asian Retail Investment Fund 3 Limited.
Lendlease Asian Retail Investment Fund 3 is a private fund which is managed by Lendlease Investment Management (LIMPL). The fund, in turn, indirectly holds a 75.0% interest in Jem, an integrated office and retail development located in Jurong Gateway.
The remaining 25.0% interest in held by another private fund managed by LIMPL.
The acquisition was completed on the same day.
Following the acquisition, Lendlease International will hold a 15.1% interest in Lendlease Asian Retail Investment Fund 3.
LREIT says a key benefit of the investment is to secure pre-emptive rights, which all existing investors have in the fund.
The investment may also provide opportunities for LREIT to potentially increase its strategic stake in the fund over time.
The pro forma gearing of LREIT following the acquisition is 36.9% as at June 30.
According to LREIT, the acquisition is accretive to its distribution per unit (DPU) based on the assumption that the acquisition had been effected on Oct 2, 2019, and LREIT held and operated Jem through June 30, and other assumptions.
“Jem is strategically located in Singapore’s second central business district and has direct access to the MRT interchange and other transport amenities. The acquisition of the 5.0% equity stake in the fund aims to benefit LREIT and its unitholders through further income diversification based on the office and suburban retail components of Jem,” says Kelvin Chow, CEO of the manager.
Units in LREIT closed 1 cent lower, or 1.5% down, at 67 cents on Oct 1.
