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MELBOURNE (Dow Jones)--Valad Property Group (VPG.AU) said Wednesday that the company will contribute the majority of its European and U.K. assets and associated debt to form a joint venture with Bank of Scotland plc, a unit of Lloyds TSB Group Plc (LLOY.LN).

Sydney-based Valad will contribute property assets to the joint venture of A$469 million, associated liabilities of A$761 million and net equity in joint ventures and investments of A$382 million (GBP187 million) to the Diversified U.K. and European property joint venture, which has a term of three years, it said in a statement

BoS will also contribute assets and associated liabilities to the venture, to be called DUKE, Valad said.

DUKE will assume existing debt facilities associated with the assets.

Valad said it expects to carry its equity in the equal joint venture at nil value as at June 30, reflecting an anticipated fall in property values.

Valad's European funds management business continues to be owned by the company and it will provide management services to the joint venture, the company said.

-By Andrew Harrison, Dow Jones Newswires; 61-3-9292-2095; [email protected]