Lendlease Selling 30% Stake in Singapore’s PLQ Mall for $210M as REIT Takes Full Control

Australian builder Lendlease has agreed to sell its 30 percent stake in Singapore’s PLQ Mall to its sponsored REIT for S$265.5 million ($210 million) including equity and assumed debt.

The deal will give Lendlease Global Commercial REIT full control of the shopping centre located at the Paya Lebar MRT interchange in eastern Singapore, following the SGX-listed trust’s acquisition last November of a 70 percent stake from the Abu Dhabi Investment Authority. 

Lendlease REIT’s cash consideration of S$100.8 million for the 30 percent interest reflects the equity value after deducting asset-level debt, according to a Wednesday statement by the trust’s manager. The agreed value of PLQ Mall is S$885 million, unchanged since ADIA’s exit and a 2.2 percent discount to the asset’s appraised value, the manager said.

“By securing 100 percent ownership of PLQ Mall, we gain full management and operational control enabling us to shape the asset’s long‑term performance and unlock value for our unitholders,” said Guy Cawthra, CEO of the manager. “100 percent ownership also enables us to fully refinance in place borrowings, which is expected to result in meaningful interest savings.”

Geylang Landmark

PLQ Mall anchors Lendlease’s Paya Lebar Quarter mixed-use development in the Geylang area and features more than 200 retail, dining and entertainment outlets, including Uniqlo, Haidilao and Shaw Theatres. The 2019-built project has 88 years left on its 99-year leasehold tenure.

The mall comprises 317,350 square feet (29,483 square metres) of net lettable area, translating to S$2,852 ($2,254) per square foot at the agreed value. The consideration implies a net property income yield of 4.5 percent for calendar year 2026, according to the manager.

Lendlease REIT will fund the acquisition by raising S$196.6 million through a non-renounceable preferential offering. Upon completion of the deal by the end of June, the trust’s total asset value will rise to S$4.2 billion, with Singapore representing 90 percent of the portfolio.

“The significant equity raise of S$196.6 million ensures that aggregate gearing is maintained at a prudent level of approximately 38 percent whilst delivering accretion in distribution per unit,” Cawthra said.

Exit Strategies

Lendlease’s latest divestment comes as the ASX-listed builder earlier this week reported a loss of A$318 million ($225 million) for the six months to the end of December, as it continues to execute on a multi-year overhaul aimed at scaling back overseas development and focusing on domestic operations.

In a research note, Morningstar analyst Yingqi Tan observed that the capital release unit, which includes assets Lendlease intends to sell, posted an operating loss after tax of A$232 million in the fiscal first half, driven by delayed transaction settlements, asset holding costs and impairments.

“Since the May 2024 strategy reset, A$2.8 billion of the planned A$4.5 billion capital recycle programme has been executed,” Tan said. “The rest of the CRU assets, mostly land and inventory in Europe and the Americas, appear to be harder to sell and are likely to require larger discounts.”

ADIA, the trillion-dollar Abu Dhabi sovereign fund led by chairman Tahnoon bin Zayed al-Nahyan, is pursuing its own portfolio rejig as it divests Asia Pacific commercial properties and reallocates capital to alternatives like Vantage Data Centers and industrial specialist GLP.

In addition to the disposal of its interest in PLQ Mall, ADIA in the past year has sold down or exited its stakes in One Museum Place skyscraper in downtown Shanghai and the Surfers Paradise mall and hotel complex in Australia’s Gold Coast. Mingtiandi reported earlier this month that the fund had sold its 50 percent stake in a Sydney office precinct to Charter Hall for A$500 million ($351 million).