UPDATE 2-Singapore's Keppel Corp to set up Australian property fund with Vicinity Centres

(Updates with Vicinity’s statement, share movement)

Aug 6 (Reuters) - Conglomerate Keppel Corp Ltd said on Monday a unit of its asset management arm had entered a memorandum of understanding with Australia’s Vicinity Centres to establish a private fund.

The companies intend to invest in an initial A$1 billion ($739.40 million) portfolio of Australian retail properties currently owned by Vicinity, Keppel said in a statement, adding that the parties plan to manage the fund through a joint venture.

Vicinity said it would form Vicinity Keppel Australia Retail Fund, which both companies said is subject to due diligence and the approval of their boards.

The deal will introduce a vast network of potential investors, particularly from Asia, to the fund, Vicinity said in a statement. This will be Keppel Capital’s first retail-focused real estate fund.

Keppel Capital, which is Keppel Corp’s asset management arm, will hold a 50 percent stake in the venture with Vicinity, and each party will hold a 10 percent equity ....

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