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Fitch expects Brexit to affect Lendlease's UK operations

Fitch expects Lendlease Corp. Ltd. to face longer-term risks for itsoperations in the U.K. brought about by market uncertainty after the Brexitvote.

The rating agency said in a note that the projectedslowdown in demand for properties in the country would impede theAustralia-listed company's growth in the medium term.

In addition, Lendlease will likely see "morepronounced" longer-term effects from Brexit due to a planned expansion ofits international urban regeneration portfolio to offset a slump in theproperty market at home.

However, the rating agency does not expect anynear-term rating action on the company, due to its capability of cashconservation where necessary.

Fitch said that because buyers at the company's residentialElephant & Castle and mixed-use TheInternational Quarter in Stratford, London, are due to completepayments over the next three to four years, Lendlease's exposure to the U.K.capital's residential and commercial property markets has increased.

Fitch noted that Brexit-induced uncertainty isexpected to reduce demand in the property markets as overseas investors lookinto its increased risks and with banks being less willing to extend credit.