Lendlease to Sell Masterplanned Communities Projects

By David Winning

Lendlease, a leading property and infrastructure company, has announced its agreement to sell 12 masterplanned communities projects to Stockland and Supalai Australia Holdings for 1.3 billion Australian dollars (US$871 million). This move is part of Lendlease's strategic pivot towards becoming a real estate asset manager.

The transaction is valued at a 20% premium to book value and is expected to contribute significantly to Lendlease's core operating profit in the next 12 months. While Lendlease will retain ownership of four projects nearing completion or with development potential, the proceeds from the sale will reduce the company's gearing by 5% on a proforma basis for FY 2023.

Stockland, a prominent real estate developer, has identified opportunities to further develop the acquired portfolio. The company plans to incorporate childcare and medical centers into the developments. Stockland's development returns are projected to align with its target range of 14-18% return on invested capital.

Under the agreement, Stockland will pay A$1.063 billion for the twelve sites and retain the right to purchase additional parcels of land worth up to A$239 million. This strategic acquisition will increase Stockland's landbank to 95,600 lots, creating the potential for settlement volumes to grow by 2,500 lots annually.

Lendlease is also exploring options to divest its China Senior Living and Australian Retirement Living businesses.