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Leandlease Global Commercial Reit has agreed to acquire a 53% stake in Lendlease Jem Partners Fund Limited (LLJP) for $159.1 million.
Lendlease Global Commercial REIT (LREIT) has proposed to increase its stake in Jem mall to up to 31.8% for a purchase consideration of about $337.3 million.
This comes after LREIT agreed to acquire a 53% stake in Lendlease Jem Partners Fund Limited (LLJP) for $159.1 million from third party vendors and a 5% stake in Lendlease Asian Retail Investment Fund 3 Limited (ARIF3) for $45 million.
It may also acquire “up to 19.8% interest in ARIF3 from other third-party investors for $178.2 million”, said Lendlease Global Commercial Trust Management in a release on Monday (7 June).
LLJP and ARIF3 own a 25% and 75% indirect interest in Jem, while LREIT currently owns an indirect interest in the mall through its 5% interest in ARIF3.
The REIT’s manager noted that the total cost of the acquisition will stand at up to $347.1 million, comprising the purchase consideration of up to $337.3 million; up to $3.4 million acquisition fee payable to the manager as well as other fees and expenses of up to $6.4 million.
It added that the acquisition is based on Jem’s agreed market value of $2.077 billion and at a discount of about 0.4% to the appraised value.
Set to be completed by 30 September 2021, the acquisition will be funded “through debt or a combination of debt and proceeds from the issuance of perpetual securities”. The proposed transaction is conditional on unitholders’ approval.
Kelvin Chow, Chief Executive Officer of the REIT’s manager, expects the proposed acquisition to enhance LREIT’s income diversification.
“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,” he said.
“The single largest asset by aggregate value of the enlarged portfolio would also have decreased from 67.6% to 55.1%.”
Located within Jurong Gateway, Jem is an integrated office and retail asset with a leasehold tenure of 99 years. It comprises six levels of retail space and 12 levels of office space that are fully leased to the Ministry of National Development (MND).
The property has a gross floor area of about 1.16 million sq ft and a net lettable area of 892,148 sq ft.
The mall enjoys direct connectivity to the Jurong East MRT interchange station as well as the bus interchange. Nearby amenities include the Jurong Regional Library and Ng Teng Fong General Hospital.
Aside from MND, other major tenants include IKEA, hypermarket FairPrice Xtra, Cathay Cineplexes, Don Don Donki, Koufu, H&M, Uniqlo and Courts.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
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