Lendlease enters joint venture with Warburg Pincus in Asia

Lendlease enters joint venture with Warburg Pincus in Asia

Australian development giant Lendlease (ASX: LLC) has announced today it has entered into a 50/50 joint venture with US private equity firm Warburg Pincus to establish a new life sciences real estate platform focused on the Asia-Pacific region.

The deal, valued at $147 million, will see Lendlease transfer its current life sciences construction and development capabilities in Asia, together with its life sciences investments, to the new joint venture entity.

The transaction is expected to generate around $66 million in net cash proceeds to Lendlease, and is subject to certain completion adjustments and conditions precedent, including third party consents.

Founded in 1966, Warburg Pincus is a New York-based investment firm that manages more than USD$81 billion in assets under management, with 250-plus companies in its portfolio.

Since its founding, the company has invested more than USD$116 billion in more than 1,000 companies globally across its private equity, real estate, and capital solutions strategies.

“With the combination of Lendlease’s 30-year track record in the Asia Pacific supporting the world’s largest pharmaceutical and life sciences companies and Warburg Pincus’s experience and track record in investing and scaling platforms, the joint venture is well-positioned to become the leading integrated life sciences real estate business in the region, offering compelling new investment opportunities to our investors,” Lendlease Global CEO Tony Lombardo said.

“This is another example of how we’re realising value from our existing operations, while further simplifying Lendlease to create a more focussed company for securityholders.”

The news comes two months since Lendlease was given the go-ahead to proceed with a $1.7 billion mixed-use project that will transform the southern end of the Queen’s Victoria Market precinct in Melbourne’s CBD. In late 2023, the company also offloaded more than $1 billion of its communities’ projects to Stockland (ASX: SGP) and Thai multinational Supalai.

In the update to investors, Lendlease said it maintains its FY24 guidance of seven per cent return on equity. It is noted that achieving this return remains conditional on the execution of a number of transactions, including this transaction and the previously announced sale of 12 communities’ projects.

The sale remains subject to regulatory approvals and other conditions precedent.

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