Lend Lease, the Australian property group that is developing London’s Olympic village, has announced a large drop in the value of its stake in Bluewater.
Lend Lease also blamed difficult UK housing market conditions on a A$121.5m (US$113m) writedown in the carrying value of Crosby Lend Lease, the company’s UK homes business, which will see full-year after-tax profits almost halve.
The value of Lend Lease’s 30% in Bluewater has fallen from £647.4m in June 2007 to £570.6m (US$1.1bn), although the company offered reassurance that this loss did not impact on its profit and loss account or balance sheet. The stake is held as inventory, at its original cost of £250m.
The fall in value of its stake in Bluewater, one of the largest UK shopping centres, gives a good benchmark of just how far commercial property values have dropped in the UK. But the exposure to the troubled UK housing market will be most worrying for investors.
Financial Times, The Times, Daily Telegraph