The Australian builder, developer and investor promises major change. But questions remain unanswered by the activist target.
The builder with 45 current, under contract and pre-construction projects has a long working history with the former US president, having been contracted to build Trump World Tower , the Trump SoHo apartment tower and Chicago’s Trump International Hotel & Tower .
“We think there is potential upside for Lendlease on a two- to three-year horizon from a review of its ownership strategy for the US and European investments platform,” Ben Brayshaw, Barrenjoey’s head of real estate research, says.“Can you just buy assets better than anybody else? I’m not sure what the compelling proposition is for Lendlease if it’s not a developer and creating product for funds,” one former employee, an industry veteran, says.
What they did was invest in long-dated projects. The time frame for those developments has just blown out exponentially.As Morschel’s replacement, Higgins embarked on a global expansion that included setting up a US funds management business. Lendlease sold its cash-cow MLC to NAB in 2000 for $4.6 billion.
But the company also had a taste of success in the Higgins era, notably the Bluewater shopping centre – then the UK’s largest and worth $1 billion – which it developed outside London in Kent, south-east England.Bluewater succeeded because Hornery – despite being chairman – played a very hands-on role in ensuring the project’s success.“He put himself in a development management position,” the person recalls.
This was, in fact, the start of a more focused strategy – of identifying what the company called a handful of “gateway” cities ripe for investment in urban regeneration projects – following the commercial success of its massive project at Sydney’s Barangaroo.Lombardo’s boss at the time, CEO Steve McCann, said he wanted to generate up to 20 per cent of total profits from the world’s fastest-growing economies.
“What they did was invest in long-dated projects. The time frame for those developments has just blown out exponentially,” the former employee says.Lendlease has $2.8 billion in assets it hopes to sell over the next financial year, including its 60 per cent stake in The Exchange TRX in Kuala Lumpur, a 6.9-hectare mixed-use development, and its management of 40,000 US military housing units, and a commercial development site in the Elephant Park London project.
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