Lend Lease Buys Larger Stake in Fund

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SYDNEY-Lend Lease on Friday has acquired a 19% interest in an AU$1.9-billion private retail fund it manages. The global property manager paid Suncorp Life and Superannuation Ltd. approximately AU$342 million (US$266.6 million) for the stake in Australian Prime Property Fund Retail.Suncorp Life, which received a 10% premium to the net tangible asset backing for the APPF Retail units, reportedly sold its holding in APPF Retail as part of a portfolio rebalancing to higher liquidity investments being undertaken buy the life insurance industry generally. The investment boosts Lend Lease’s stake in the fund to more than 21%. Lend Lease Asia Pacific chief executive Ross Taylor says the purchase is in line with the company’s plan to grow its wholesale property funds management business in the Asia Pacific region. “Our decision to assist Suncorp Life with an expedient divestment of its major holding and to take a co-investment position in APPF Retail means there is a very close alignment of interests between ourselves and the other investors in the fund,” he says in a prepared statement.APPF Retail owns several landmark shopping centers in Australia, including Erina Fair on the NSW Central Coast, Sunshine Plaza in Maroochydore and Macarthur Square in Sydney’s West. Sunshine Plaza at Maroochydore is 50:50 owned by GPT and APPF Retail, which has first right of refusal over the 25% stake in the mall that has been proposed to be sold to Westfield as part of GPT’s internalization proposal. APPF Retail has not made a decision to exercise its right and, thereby, prevent the sale to Westfield.”Looking ahead, depending on the investment climate and the strategic needs of the fund, Lend Lease may at least partly reduce its holding either by offering to co-investors or as a means of introducing new investors to the fund,” Taylor says.Lend Lease is the third-biggest wholesale property funds manager in Australia with more than $4 billion in wholesale funds under management in the Asia Pacific. A company representative did not return a phone call seeking comment.