The property and infrastructure company Lendlease Group (ASX:LLC) announced that an unnamed Asian institutional investor will purchase a 25 percent stake in Lend Lease One International Towers Sydney Trust (LLOnelTST).
LLOnelTST, which is located in the Barangaroo South precinct, was established in June 2015. Post the completion of the sale of a 25 percent interest in the fund, Lendlease’s equity commitment will ease from $525 million to $175 million. The transaction is conditional on the purchaser receiving an approval from Foreign Investment Review Board.
The Qatar Investment Authority (QIA) and the Lendlease managed Australian Prime Property Fund Commercial form the remaining investors. Major tenants of the Tower include PwC, HSBC, Marsh & McLennan Companies and Servcorp.
Lendlease Group Chief Executive Officer and Managing Director, Steve McCann, shed further light on the transaction: “The strong momentum we saw in our business during FY15 has continued into 1H16, with today’s announcement introducing another major institutional investor to Barangaroo South. Interest in the Barangaroo South precinct has grown substantially in recent year with total equity raised across the precinct of circa $3.4 billion.”
Mr McCann also stated that the tower is on-track to become Sydney’s pre-eminent new financial services hub, while it delivers efficiency and environmental performance for its tenants. The Towers Three and One are expected to complete in FY16 and FY17 respectively, while the Tower Two was inaugurated in the beginning of FY16 and is occupied by Westpac.
Lendlease posted a 25% lower Net Profit After Tax for FY15. The company described that the lower profit was due to a decline in earnings from operations in Asia and Europe by around 75%. Lendlease also stated that its FY14 profit included the sale of a shopping centre in the UK, which attributed to more than half of the NPAT posted during the period.
LLC last traded at $13. 65 as at 10:12 AM (AEDT). The stock followed a downtrend since the beginning of 2015, to close approximately 16 percent lower year-to-date.
Author: Simon Herrmann
Dec 23, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.