Lend Lease's Clarke Says Selling Assets `Tougher Than Usual'

By Jason Scott

Nov. 16 (Bloomberg) -- Greg Clarke, chief executive officer of Lend Lease Corp., says Australia's largest developer is finding it ``tougher than usual'' to sell assets.

Lend Lease last week scrapped plans to sell its half of the King of Prussia shopping center, the third-largest mall in the U.S. The Sydney-based company had cash reserves of more than A$800 million ($518 million) as of Oct. 31.

Clarke spoke today on ABC's Inside Business television program.

On asset sales:

``We've got 25 percent of our profits every year from assets we've developed for sale around the world. We're finding that at the minute tougher than usual, but we've got a number of people negotiating with us for some of those assets and we're pretty hopeful we will manage to sell some.

``One of the reasons we have the lowest level of debt in the property industry is that we didn't spend all our money at the top of the market. So we're trying not to sell assets that we don't need to sell. We're still pretty confident about being able to sell them, but if we can't we won't sell them, because we're not a distress seller.

``There are buyers available for the assets we have, specifically in the U.K. and the U.S. The market's tough but there's still a lot of buyer interest.''

On Australian commercial property, economy:

``In the property sector you're a hostage to market cycle. One of the reasons we deal in the U.K., the U.S., Singapore and Australia is the cycles are slightly different. Even though the Australian market looks a bit unhealthy at the moment, it looks a damn sight better than the U.K., Europe and the U.S. If we were a U.K.-only property business we'd be in terrible trouble.

``There's a chance, and I don't know how big a chance, that the housing market and the value of commercial property, like retail and residential, will fall significantly. We've seen it fall into a pit in the U.K. and the U.S. If the same happens in Australia, nobody knows if it will, that won't put us out of business. We haven't made bets and taken on levels of debts where market changes can put us out of business.

``The most highly leveraged vehicle in the world is the Australian household. It has world-class high credit-card debt, world-class high property-mortgage leverage. If people can't service those property debts or those credit card debts, that will cause a recession.''

To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net.