2nd UPDATE: Lend Lease Consortium Preferred Bidder For A$1.4 Billion ING Retail

Lend Lease Corp. (LLC.AU) said Wednesday that it is part of a consortium which is the preferred bidder for the A$1.4 billion ING Retail Property Fund.

The fund owns 14 shopping centers in Australia and New Zealand, including Perth's A$450 million Joondalup Shopping City. In recent months the fund has sold three assets: Brisbane's Wynnum Plaza and the Endeavour Hill and Geelong Homemaker centers.

Lend Lease, Australia's largest property developer, has been on the lookout for distressed assets while property development financing and construction is constrained, and ING Groep NV has said previously that it plans to sell its insurance and investment management businesses to concentrate on banking.

Lend Lease, which had A$1 billion in cash on its books as of June 30, will contribute up to around 20% of the capital needed for the deal, with the rest coming from its managed funds and capital partners, Investment Management Chief Tarun Gupta said in an interview with Dow Jones Newswires.

"Some of the assets will come under the management of Lend Lease Retail, and the assets will go into the respective managed funds we have, and become part of our overall platform," Gupta said.

"The assets from our point of view are attractive to our platform. There are some really high quality assets and we believe we can manage them and add value over the long term."

Gupta declined to name the other consortium partners.

In a lukewarm reaction to Lend Lease's interest in investing in ING Retail, Moody's Investor Services said late Wednesday that it has placed the company's Baa3 issuer and senior unsecured ratings on review for a possible downgrade.

The credit ratings agency noted that Lend Lease is also poised to buy the all securities that it doesn't already own in retirement home company Lend Lease Primelife Group (LLP.AU) for A$192.1 million.

"There is a real risk that the company's credit metrics may come under our tolerance for the Baa3 rating," Moody's Senior Analyst Clement Chong said in a statement.

The Australian Financial Review and The Australian newspapers reported earlier this month that ING Retail fund's investors were five pension funds including Singapore's GIC Real Estate, one of that country's sovereign wealth funds, and Prudential PLC.

The acquisition, which is subject to further discussions, may be completed in the next six weeks, Lend Lease said.

-By Andrew Harrison, Dow Jones Newswires; 61-3-9292-2095; [e-mail]

(Ross Kelly in Sydney contributed to this article.)