Archive | Lend Lease

Published 21 February 2011

The Lend Lease Group said on Thursday its operating profit for the December half was up 17.2% to $A220.2 million, and its statutory profit was up 10.5% to $A226.5 million.

However, earnings/security after tax fell from A40.1c to A38.9c.

The statutory profit figure included a net $A6.3 million property investment revaluation gains after tax.

Among the group’s highlights:

The New South Wales Government approved the Barangaroo South concept plan (for the strip between the Sydney Harbour Bridge & Darling Harbour) and a planning application was lodged for the first commercial building on the siteLend Lease was named preferred developer for the 4500 Toolem masterplanned urban community project in Victoria and obtains approval to progress the 4800 Calderwood project in NSWThe group reached agreement with Japanese house builder Sekisui House Australia, involving a number of masterplanned urban community projects & apartment developmentsIn Singapore, it finalised the purchase of the Jurong Gateway mixed-use site in conjunction with the Lend Lease-managed Asian Retail Investment FundIn the UK, the Lend Lease-managed UK Infrastructure Fund was launched, raising £220 million; it bought established healthcare, education & accommodation assets from Lend LeaseIt signed a conditional agreement with the London borough of Southwark for the regeneration of the Elephant & Castle and met all conditions on the framework agreement for the second stage of the Stratford City developmentIn New York, it substantially reduced its exposure to litigation relating to the World Trade Centre, with any liabilities arising out of debris removal now limited to available insuranceIn December, Lend Lease entered into an agreement to acquire 100% of Valemus Australia from Bilfinger Berger SE; Valemus is the parent of Abigroup, Baulderstone and Conneq, andThe group said its liquidity position was strong, with cash reserves of $A1.4 billion, undrawn committed bank facilities of $A600 million, average maturity of drawn debt facilities 4.8 years, group interest cover of 6.5 times.

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 27 April 2010

Lend Lease Corp Ltd said today it was moving to a regional business structure from 1 July. It’s appointed 4 regional chief executives – Rod Leaver for Australia, Eng-Peng Ooi for Asia, Dan Labbad for EMEA (Europe, the Middle East & Africa) and Bob McNamara for the Americas, all reporting to group chief executive & managing director Steve McCann. Each regional chief executive will be responsible for all operations, including development, project management, design & construction, public-private partnership and investment management. Mr McCann said the group had established 4 global centres of excellence to support each region. Each of these centres will work closely with the regional chief executives to focus on best practice, strategic growth, risk management & operational excellence. The 4 global heads are David Hutton for development, Murray Coleman for project management, design & construction, Mark Menhinnitt for public-private partnership and Tarun Gupta for investment management. Mr McCann said: “The regional structure aligns the business with the group’s integrated property solutions offering and demonstrates the depth & quality of the Lend Lease senior management team. It will enable a more focused & co-ordinated approach to our growth strategy and the execution of major projects in each of our core regions.”

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 23 December 2009

Lend Lease Corp Ltd has closed a new wholesale fund, Lend Lease Real Estate Partners 3 (LLREP3), after receiving $A218 million in commitments from a small group of investors. The fund will seek to invest in good quality sub-regional shopping centres & commercial assets over the next 12 months. It will have a 6-year life and target gearing of 30-50%. It’s expected to participate in the consortium which has been announced as the preferred bidder for the ING Retail Fund.

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 14 May 2009

Lend Lease Corp Ltd said today the UK Government & its Olympic Delivery Authority had turned down its offer to invest in the 2012 Olympic village project.

Lend Lease chief executive Steve McCann said: “Lend Lease offered to invest equity of £150 million in the project but the UK Government & the authority have decided the overall risk:return criteria for this type of project in the current market environment is not conducive to private funding.”

Instead, the Government will fund development of the Stratford City athletes’ village without sourcing private funding. Lend Lease will continue to design, develop & build the village under an existing development management agreement signed in August 2008. Under that agreement, Lend Lease receives a fee for service, net of costs. Profits will start to be realised in the 2010 financial year and emerge progressively over the lifecycle of the development. Mr McCann added: “The project is ahead of schedule and we can now focus on delivery under an attractive fee deal without equity risk. In this economic environment we will benefit from freeing up this amount of liquidity and have a number of attractive opportunities where the capital can be redeployed.”

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 22 November 2006

Lend Lease Corp Ltd, of Australia, has settled the $S617.2 million purchase of the Somerset Central retail development site from the Urban Redevelopment Authority of Singapore. It will use equity & project-level debt to fund the acquisition.Lend Lease said Somerset Central was one of the last remaining major retail development opportunities along Orchard Rd, Singapore’s main tourist retail strip. Work should start in early 2007 for completion in 2010-11.

The Australian company intends to own the project in a joint venture with an Asian wholesale fund it’s marketing to institutional investors.Want to comment? Click on The new BD Central Forum or email [email protected].

Attribution: Company release, story written by Bob Dey for this website.

Published 28 December 2005

Lend Lease Corp Ltd’s masterplanned communities business, Delfin Lend Lease, will create a flagship community in Melbourne’s north-eastern growth corridor after acquiring the Laurimar residential estate at Mernda for $A61 million on a staged-payment basis.Laurimar already has 1500 residents in 500 homes and Delfin Lend Lease will develop another 1800 residential lots, a 4000m² retail centre and parks on the remaining 200ha over the next 10 years. On completion, the development will be home to around 9000 residents.

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Published: 18 August 2005

Lend Lease Corp Ltd said yesterday it had met its full-year target with an $A281.6 million net after-tax operating profit.

That result excluded one-off items & earnings from discontinuing Real Estate Investments. Lend Lease said it represented a 13.5% increase over the underlying operating 2004 result and was in line with guidance the company had provided throughout the year.

The actual bottom line was an $A210.7 million after-tax profit, down 37% on last year’s $A333.5 million after significant one-off costs associated with the failed merger with the General Property Trust and the implementation of recurring cost-saving initiatives. The 2004 result was boosted by one-off profits of $A79.7 million after tax associated with the sale of IBM GSA.

Earnings/share rose from A61.8c to A77.8c.

In line with its policy of delivering a steady increase in dividends within a payout range of 60–80% of net operating earnings, Lend Lease will pay a final fully franked 29c/share, taking the year’s total to A57c/share (at a payout rate), up from A44c/share (at a payout rate).

The retail & communities business (previously integrated development businesses) increased operating profit by 14.7% to $A102.5 million, the investment management business got strong rental growth from its retail assets, increasing operating profit by 8.1% to $A108.4 million, and the project management, construction & PFI business “continued to retrace its growth path” with an increase in operating profit to $A139.2 million, driven largely by a return to profitability in Asia-Pacific operations.

Chief executive Greg Clarke said he was pleased not only with the strength of the result but by the way the company had delivered on its strategy despite the distractions of the proposed GPT merger: “The outcome with GPT has not changed our strategy for growth. Over the past 18 months we have made substantial ground in refocusing Lend Lease on a vision & business strategy that will deliver enhanced predictability & sustainability of earnings growth to our investors.

“We have strengthened our position as a leading international retail & residential property group, supported by strong construction management & investment management businesses. The recent acquisitions of Crosby Homes in the UK and the final minority interest in Actus in the US, combined with securing 3 new retail centre opportunities in the UK, illustrate the strength of our momentum,” Mr Clarke said.

After GPT took over its own management in June, Mr Clarke said Lend Lease still had $A11.6 billion of assets under management. He said the group’s outlook was positive.

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Published: 23 June 2005

Lend Lease Corp Ltd has bought UK builder The Crosby Group plc for £261 million, cancelled the on-market share buyback it announced last November and said it would resume franking dividends.

Crosby, still 50.01%-owned by Berkeley Group plc after an incentivised management buyout in 2003, is an urban-regeneration developer with strong market positions in major regional centres such as Birmingham, Manchester & Leeds.

Sydney-headquartered Lend Lease operates in the London & South-east England residential markets. Chief executive Greg Clarke said Crosby came with a 4-year workload and broadened Lend Lease’s scope to participate in major land development schemes, government-sponsored urban housing & urban regeneration projects and mixed-use retail-residential projects.

Mr Clarke said the UK market dynamics & public policy were working in Lend Lease’s favour:

The UK has suffered from long-term housing under-investment
The shortage has been fuelled by a number of factors, including highly restrictive planning, the decline in local body housing construction and limited housing association construction
This was set against market fundamentals of continuing population growth, a continuing decline in average household size, stable affordability & house price trends and reduced barriers for residential investment property, such as buy-to-let.

Mr Clarke said the result was a shortfall of 30,000-plus homes/year, notwithstanding 190,000 housing starts/year. He said Crosby had successfully tapped into a growing investor appetite for residential property, and the Government was alive to the shortfall & issues of affordability.

Mr Clarke said Crosby had 70 lower-density sites under development in 2002, but was now concentrating on 14 large-scale high-density brownfield sites with planning permission, increasing its margins. He said Crosby’s operating margin would be around 20%, at the high end of the traditional 15-20% UK housebuilder margins.

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Published: 6 June 2005

While Lend Lease Corp was losing the major management contract for the General Property Trust, another fund it manages – Australian Prime Property Fund Retail – had its $A200 million new equity issue heavily oversubscribed by institutions last week.

The wholesale fund paid $A160 million on 26 May to buy SAS Trustee Corp’s remaining 50% of the 57,000m² (gross) Greensborough Plaza in Melbourne, taking its Greensborough ownership to 100% & total assets to 8 malls worth $A1.2 billion.

Lend Lease Real Estate Investments manages Australian Prime Property Fund Retail & 2 other APPF wholesale funds.Lend Lease paid $A342 million in April to buy Suncorp Life & Superannuation Ltd’s interest in the Retail fund. Suncorp was a cornerstone investor in the fund when it was established in 1989, and sold it $A450 million of mall assets in 2001, when the Suncorp stake was raised.

Fund manager Philip Ling said the 3 APPF funds had raised $A870 million in 11 months, nearly 3 times their historic average annual equity inflow.

“APPF Retail is now fully funded with an exceptionally strong balance sheet and, accordingly, will be temporarily closed to further equity raisings, subject to future acquisitions,” Mr Ling said.

“The fund is now ideally positioned to participate in the planned $A660 million redevelopment & expansion pipeline of projects for its portfolio of interests in 8 super-regional & regional shopping centres.

“Over the last 5 years APPF, working in conjunction with Lend Lease, has initiated over $A290 million in centre redevelopment works, which on completion were achieving an average yield of 8%/year. This record, together with a total return of 17.5% for the year to March 2005 and market-leading returns for the 3- & 5-year periods as well, have made APPF highly attractive to institutional investors seeking long-term, direct exposure to quality retail assets.”

Websites: Lend Lease

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Published: 12 February 2005

Lend Lease Corp Ltd increased its after-tax operating profit, excluding one-offs, by 54% in the December half – a scoresheet which looks great if you don’t read below the first line.

Excluding one-offs, profit rose from $A108.5 million to $A167.1 million. But taking the $A50.8 million expense of restructuring & the abandoned General Property Trust merger into account this time, and an $A79.7 million after-tax profit from sale of Lend Lease’s interest in IBM Global Services Australia Ltd the previous time, “reported net profit after tax” fell 32%, from $A188.2 million to $A128.5 million.

Lend Lease returned to profit last year, making $A237 million after losing $A715 million in 2003. It started writing off hundreds of millions of dollars, mainly on US business, in 2001.

Given that the failed GPT deal was a merger with an accomplice displaying a very bodgy line in old valuations – holding valuations down for that bid but raising them after Stockland Property Group came along with a hostile bid – all results from this group have to be regarded with a great deal of circumspection.

But Lend Lease was positive this week, heading its announcement Result reinforces growth strategy.

Earnings/share, excluding one-offs, rose 63% to A41.9c. The company has increased its interim dividend from A18c to A28c, unfranked on both occasions.

Among the highlights:

Bovis Lend Lease’s Asia Pacific operations returned to profit and the division increased its after-tax profit by $A22.5 million
The integrated development business doubled profit to $A49.4 million after tax, mainly through bid cost recoveries which pushed European profit up to $A26.2 million, and a 34% after-tax profit from Delfin Lend Lease
Income growth at Bluewater in the UK & King of Prussia in the US boosted real estate investments profits 14% to $A51.3 million
Managing director & chief executive Greg Clarke said $A40 million of the $A60 million savings & synergies identified in the merger proposal had been implemented, with benefits flowing from the 2nd half. The merger proposal cost $A25.5 million after tax; putting the $A40 million/year after-tax savings in place cost $A25.3 million after tax
Lend Lease had $A1.2 billion cash at balance date, $A828.8 million debt, 14% gearing (gross debt: total tangible assets)
Interest cover was 9.9 times, versus a target of 6.

Website: Lend Lease

Earlier stories:

24 January 2005: GPT pulls out overdue revaluations to show how bad Stockland offer is

18 November 2004: Lend Lease merger with GPT blocked

21 August 2004: Lend Lease climbs back up with 3.1% operating profit gain

25 May 2004: Lend Lease proposes merger with General Property trust to create $A10 billion business

30 May 2003: Lend Lease chairman retires as new strategy put in place

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