Lend Lease announced it has entered into an agreement to sell its interest in the King of Prussia shopping mall to the Morgan Stanley Prime Property Fund at a gross valuation of US$1.25 billion. Lend Lease has a 50% interest in the asset and will receive net proceeds of circa US$545 million after taking into account the asset level debt. Lend Lease expects to book a profit of circa US$100 million on the sale, net of tax and other costs.
Having regard to current exchange rates, the US$ proceeds will principally be used to repay the Group’s GBP denominated debt and to fund its investment pipeline in the US.
The transaction is subject to customary conditions precedent for a sale of this type of partnership asset and is expected to achieve financial close in August 2011.
King of Prussia is the largest enclosed retail shopping mall on the East Coast of the United States and is located northwest of Philadelphia. Lend Lease acquired its interest in 1996.
Lend Lease Group Chief Executive Officer and Managing Director, Mr Steve McCann, said the Group’s investment in the King of Prussia shopping mall has delivered strong returns. “The price achieved for the sale of the King of Prussia shopping mall is an excellent result for the Group.”