PETALING JAYA (September 21): Australian property and infrastructure group Lendlease Corp Ltd is reported to have secured financing for the development of its 17-acre Lifestyle Quarter in the Tun Razak Exchange (TRX).
The Star cited sources who said that work on the site has picked up considerable pace of late.
Lendlease Asia chief executive officer Tony Lombardo declined to disclose the amount of loan financing being sought, but said that both local and foreign banks are involved.
October is when the loan and financing arrangements are expected to be completed.
In May, The Edge Financial Daily reported that Lendlease had been close to securing between RM2bil and RM3bil worth of financing for its Lifestyle Quarter, but was having difficulties in locking down the financing.
Lendlease is the only company to have signed a joint-venture (JV) agreement with TRX City Sdn Bhd —then known as 1MDB Real Estate Sdn Bhd, the property arm of 1Malaysia Development Bhd (1MDB) — in 2014 in a 60:40 deal, with Lendlease holding the bigger stake.
TRX City sold several pieces of land in 2015. Lendlease’s parcel is considered the key to holding all the different developments together.
The daily reports that Lombardo said the gross development value (GDV) of the Lifestyle Quarter is expected to exceed A$3bil, or more than RM9bil. Lendlease Malaysia senior corporate affairs manager for Malaysia Norleen Abd Rahman said that equity sunk as at June 30, 2018 is A$316.3mil, or about RM1bil.
TRX’s planned developments are estimated to have a GDV of RM40bil.
Sources cited by the daily said that TRX’s links to 1MDB may have impeded stakeholders from getting financing.
According to the May report by The Edge Financial Daily, six banks had initially pledged their support, including Malayan Banking Bhd, CIMB Group Holdings Bhd along with several foreign banks.
However, the commitment of a local bank was a condition for funding that was difficult to secure due to 1MDB.
Having now secured the necessary financing, Lendlease plans to launch its serviced apartments next year, with three parcels having been earmarked, with two blocks per parcel.
The Lifestyle Quarter will have a total of 2,326 serviced apartment units.
Lendlease has completed its leasing suites in Menara JCorp in Jalan Tun Razak, and prepares to negotiate with new tenants, having already secured three anchors to take up 26% of its retail mall which has a net lettable area of 1.3 million sq ft.
Japanese departmental store Seibu, a new concept cinema to be operated by Golden Screen Cinemas and Hong Kong-based supermarket Dairy Farm are the three anchors.
The sales gallery for the serviced apartments to be launched next year is being built now.
The Lendlease group has allocated RM4bil for new investments in Asia, Lombardo said, adding that: “Lendlease is looking to secure another two to three large-scale urban regeneration projects across Asia, similar in scale and size to Paya Lebar Quarter in Singapore and TRX Lifestyle Quarter in Malaysia over the next few years.
“Lendlease’s strength is in place making and creating the best integrated mixed-use places,” he said.
Referring to a World Bank report, he said that 90% of Malaysians will be living in cities by 2050, compared to 74.5% as of 2016.
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