The manager of Lendlease Global Commercial REIT (LREIT) has announced that it is increasing its stake in Jem through the acquisition of a 53% stake in Lendlease Jem Partners Fund for $153.1 million, as well as the acquisition of up to 19.8% interest in Lendlease Asian Retail Investment Fund 3 (ARIF3) for a total of up to $178.2 million.
The acquisition in ARIF3 includes a 5% stake being acquired from Lendlease International for $45 million, while the remainder would be acquired from third-party vendors.
Upon completion of the proposed acquisition, LREIT will hold an effective indirect interest of up to 31.8% in Jem.
The acquisition is based on an agreed market value of Jem at $2.08 billion and at a discount of approximately 0.4% to the appraised value. The estimated total cost of the proposed acquisition will be up to S$347.1 million, inclusive of fees to the manager of other expenses.
See also: Potential acquisition on the cards for Lendlease Global Commercial REIT: CGS-CIMB
The acquisition will be funded through debt or a combination of debt and proceeds from LREIT’s recent issuance of perpetual securities. The acquisition, which is conditional upon LREIT unitholders approval, is expected to complete by Sep 30.
Kelvin Chow, CEO of the Manager, says the acquisition is in line with the manager’s strategy to optimise LREIT’s portfolio. “The acquisition price is attractive for a high-quality asset like Jem,“ he says.
“Following the acquisition, the enlarged portfolio size of $1.8 billion will have a diversified asset base and an increased exposure to more resilient suburban retail and decentralised office segments. The single largest asset by aggregate value of the enlarged portfolio would also have decreased from 67.6% to 55.1%,” he adds.
Units in LREIT closed flat at 77 cents on June 4.
