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Highlights:
- Shares of Lendlease were spotted trading marginally downwards on Friday.
- Yesterday, the company shared that it has struck a joint venture with Mitsubishi Estate Asia.
- Reportedly, the joint venture would buy One Circular Quay for AU$800 million.
- Mitsubishi presently has 19.9% interest in the One Circular Quay and can increase to 66.7%, subject to certain conditions.
Shares of Lendlease Group (ASX:LLC) were trading in red today (15 July 2022), down 1.145% at AU$9.490 apiece at 1:42 PM AEST. The company’s downward trend is likely to be influenced by its benchmark index, ASX 200 A-REIT (INDEXASX:XPJ) which was down by 0.066% around 11:30 AM AEST. However, at around 2:00 PM AEST, the sector did bounce back somewhat and was seen up 0.77%.
The share performance of the AU$6.61 billion market capitalisation company might be also driven the broader market, ASX 200 which was 1.32% down to 6,562.90 at 11:48 AM AEST.
On Thursday (14 July), the company announced that it has formed a joint venture (JV) with Mitsubishi Estate Asia to acquire a luxury twin tower project in Sydney – One Circular Quay for approximately AU$800 million. As per the release, the joint venture would pay an additional AU$50 million if certain project outcomes are delivered.
About One Circular Quay
Image source: © Johncarnemolla | Megapixl.com
One Circular Quay is an international five-star hotel, earlier owned by AW Holding Group, Australia. The development is estimated to have a 59-level luxury residential tower and a second tower built as a 220-room luxury hotel.
According to Crone Architects, the site area of this Sydney development is 4,040 square meters and is under construction. Crone Architects said that this development would become the ‘most luxurious hotel and residential location in Australia.
Details of the transaction
Lendlease said in a statement that the estimated development end value of the project (One Circular Quay) is circa AU$3 billion.
The project will start soon and is likely to get over by 2027.
According to the ASX announcement, Mitsubishi presently has a 19.9% interest in the JV. Subject to certain conditions, it will increase to 66.7%; as a result, the interest of Lendlease will decrease to 33.3%.
Lendlease informed that it would receive equity returns on its capital, acquisition fee on settlement and earn development management and construction management fees as well.
About Mitsubishi Estate Asia
Mitsubishi is a real estate developer based out of Singapore and operates its business across ten countries and regions. Mitsubishi Estate Asia Pte. Ltd. was established in 2008.
The group operates the commercial property, residential, international, investment management, architectural design and real estate business group.
The share price performance of Lendlease
Lendlease shares have gained 0.80% in last five trading days and 1.66% in last one month. On a year-to-date basis, the share price has dropped 12.82%, and the yearly fall is 18.79% (as of 1:51 PM AEST today).
About Lendlease
Lendlease is an AU$6.61 billion market cap ASX-listed real estate firm. The group operates in the American, Europe and the Asia Pacific regions. The company deals majorly in retail property management, greenfield development projects, and asset management and development.
