Lend Lease brushes aside concerns over its JV with 1MDB - report

KUALA LUMPUR: Australia-listed property developer Lend Lease, which in March formed a joint venture with 1Malaysia Development Bhd (1MDB) to develop a A$2.8bil (RM8bil) project at the Tun Razak Exchange (TRX), has dismissed concerns over the project’s future, according to a report.

The Australian Financial Review (AFR) reported a spokesperson as saying: “As with any agreement, we have undertaken due diligence and put in place appropriate protection for Lend Lease,”

The Lifestyle Quarter, spanning over 17 acres, will comprise a shopping centre integrated with TRX’s multi-layer central park, along with three residential towers and a hotel. Construction is scheduled to start in late 2015.

Local reports said the Lifestyle Quarter would be developed in a 60:40 partnership, with Lend Lease taking a majority stake.

“The Lifestyle Quarter at TRX provides an opportunity for continued success in the region, leveraging Lend Lease’s global capabilities in partnering with national and city governments in major cities around the world to redevelop large scale urban regeneration projects,” Lend Lease group chief executive officer and managing director Steve McCann said in a statement to the Australian Securities Exchange in March.

The AFR article said analysts expressed uncertainty over whether the latest allegations might impact the project and Lend Lease.

It quoted CLSA analysts describing to clients that the project was “risky for Lend Lease but the estimated US$300mil (RM1.15bil) maximum exposure is not threatening.”

Lend Lease has operated in Malaysia for over 35 years. Among projects it has been involved in are the Petronas Twin Towers, Setia City Mall and Pinewood Iskandar Malaysia Studios.