Urban Regeneration

During the year we made solid progress on our major urban regeneration projects around Australia. A number of milestones were achieved at Barangaroo South including our first profit contribution, the signing of an exclusive agreement with Crown Limited for the development of an international hotel and receiving planning approval for the first two residential buildings post year end in July 2013.

At Melbourne’s Victoria Harbour we continued to advance the master plan, completing the world’s tallest residential timber building, Forté, as well as the Aurecon Centre commercial building, Lifestyle Working Collins Street commercial strata building and residential apartment building, EXO.

Construction continued at the RNA Showgrounds redevelopment project in Queensland, with the completion of the 22,000 square metre Royal International Convention Centre. The first residential apartment development, The Green, was launched and construction is due to commence in late 2013.

In Western Australia, we executed the development agreement for the $1 billion Waterbank mixed-use redevelopment project, including 600 residential dwellings, on the banks of Perth’s Swan River, and work on the design and planning continues ahead of the expected start of construction in 2014.

Adding to the strength of our pipeline in urban regeneration, the Darling Harbour Live consortium and Lend Lease were selected by the New South Wales Government to redevelop a 20 hectare area of Darling Harbour to create a revitalised convention, exhibition and entertainment hub.

 

1. The Group sold the Aged Care business during the year.

“Our substantial development pipeline of $31.1 billion, our residential communities backlog of over 55,000 land lots combined with more than $10 billion in funds under management highlights the scale and diversity of our Property business in Australia. Looking ahead, our focus is on driving investment performance for the business and for our partners, and leveraging our end to end integrated model to successfully deliver our extensive project pipeline.”

Tarun Gupta, Chief Executive Officer – Property, Australia

Development

While consumer sentiment fluctuated during the year impacting the outlook for the housing market, communities’ projects in growth corridors traded well. The Yarrabilba project in Queensland achieved a strong first full year of trading. In addition, the new communities of Alkimos and Coolbellup in Western Australia, Stoneleigh Reserve in Queensland, and Jordan Springs in NSW, contributed to an 11 per cent increase in settlements compared to the same reporting period in 2012. 

Responding to market demand for smaller, more affordable apartments, pre-sales in the apartments business increased by 30 per cent due to successful pre-sales of Studio Nine, in Richmond, Victoria; The Green at RNA Showgrounds in Brisbane; and Concavo, at Victoria Harbour.

The Aged Care business was sold for $271.7 million to Australian Aged Care Partners. In the retirement living business, Isabella Gardens in Canberra was the first Australian retirement living village to achieve the Gold Liveable Housing Design Quality Mark from Liveable Housing Australia, reflecting our ability to respond to the lifestyle needs of older Australians.

Investment Management

Funds under management grew to $10.3 billion, up 17 per cent on last year, with the launch of a new wholesale investment vehicle, Lend Lease International Towers Sydney Trust, securing
$2 billion of equity commitments for the funding and development of the first two commercial towers at Barangaroo South. With 16 retail assets under management and a strong retail development pipeline including Lakeside Joondalup Shopping City, Craigieburn Central and Barangaroo South, there are good opportunities to further enhance trading performance and drive investor returns.

“Creating a unified construction and infrastructure business brings with it a number of benefits. We are now a more capable, efficient and competitive business in each of our chosen sectors; building, engineering and construction services. Coming together under the Lend Lease master brand is an important milestone that enhances our financial strength and delivery capability.”

David Saxelby, Chief Executive Officer – Construction & Infrastructure, Australia

Construction

The construction business finalised the integration of the Abigroup, Baulderstone, Project Management & Construction and Infrastructure Services businesses post year end, on 1 August 2013. They now operate as sector based businesses under the Lend Lease brand, with one business in each of the building, engineering and construction services sectors. The combined strength of these businesses leverages our core capabilities, skills and experience and differentiates our position in the construction and infrastructure market.

New projects secured in the full year period to June 2013 include Sunshine Coast University Hospital project, New Bendigo Hospital, Lakeside Joondalup shopping centre redevelopment, City West Police Complex, Pacific Highway Nambucca Heads to Urunga upgrade and the second commercial tower at Barangaroo South.

The construction business achieved backlog revenue of $9.6 billion from a mix of building and engineering projects including the University of Technology Sydney Faculty of Engineering and Information Technology and Dr Chau Chak Wing buildings, Queensland Children’s Hospital, Hunter Expressway, the M5 West Widening, Victoria’s Regional Rail link project, the Adelaide Convention Centre and the Adelaide Oval redevelopment.

Infrastructure Development

The year saw continued investment via the Public Private Partnerships model. Operating Profit After Tax increased to $41.1 million, within our Infrastructure Development business principally from three projects – Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and the New Bendigo Hospital. 

Outlook

We remain focused on the successful execution of our major urban regeneration and residential projects pipeline, growing funds under management and continuing to have a balanced and diversified portfolio across the region. We will also leverage the strength of our new operating businesses in the building, engineering and construction services sectors to create a leading construction business.