Over the last five years Lend Lease has developed and delivered on its strategy of restoring and building the business. Successfully cementing our leadership position will enable Lend Lease to deliver superior returns for securityholders, including a sustainable return on equity of circa 15 per cent and producing above average total securityholder returns.
At 30 June 2013, Lend Lease’s estimated end value development pipeline was over $37 billion, the largest it has ever been in the Group’s history. This includes an enviable pipeline of integrated urban regeneration projects which form part of our key priorities for 2014 and beyond. Having secured projects at the right margins, in conjunction with capital efficient land payment agreements, executing those projects successfully will underpin the future earnings of our company over the coming decade.
Major urban regeneration projects such as Barangaroo South and Darling Harbour Live (Sydney), RNA Showgrounds (Brisbane), Victoria Harbour (Melbourne), Waterbank (Perth) and Elephant & Castle (London) represent a large portion of where we will allocate our capital over the next few years. As we consider capital allocation more broadly, alongside these opportunities we will look at diversification into other sources of recurrent annuity-style income streams. Capital allocated in this space will be to property and infrastructure and typically either through our own Investment Management platform or via equity investments originated by our Infrastructure Development business.
In total we expect to invest between $1 billion to $1.5 billion of capital over the next three years utilising our strong balance sheet and access to third party capital.
Finally, we will remain vigilant on targeting operational excellence and reducing the Group’s overall cost base. Over the last 18 months we have invested in our people, technology, processes and systems. In the next three years we expect that the investments made will begin to pay dividends in the form of greater operational leverage for the Group.
In the last five years we have established a strong track record. Our achievements mean we are well placed to deliver the benefits of our pipeline to our stakeholders over the next three to five years.
