Lendlease will end all international property development and sell its overseas construction divisions, marking the biggest shake-up at one of Australia’s largest real estate groups since it sold MLC to the National Australia Bank more than two decades ago.
The board is expected to ask Lendlease chief executive Tony Lombardo to oversee the offshore divestments. The first asset sales are pegged for this year, sources toldThe retreat, expected to take a few years, will start on Monday, when Lendlease marks more than $4 billion of offshore businesses and projects for sale.
The decision to exit the cyclical offshore construction and development businesses comes as investors have grown critical of Lendlease’s performance and capital allocation, particularly at its offshore works.in April that called the board “unfocused and over-extended”. Allan Gray’s Simon Mawhinney, another major Lendlease investor, separately suggested the company could
Lendlease’s UK business, meanwhile, was hit by weakened profits and a dispute at one of its hospitals. Pre-tax profits were £11.9 million last June, down a third from a year earlier.The company will pay almost £8 million to the St James’s University Hospital in Leeds after Lendlease unsuccessfully tried to sue infrastructure consultant Aecom for £3 million over fire-safety defects at the Leeds hospital.
Tom Bodor, an analyst at UBS, said Monday’s strategy day would be “a pivotal moment” for the company’s future, but played down any expectations that the meeting would improve the share price.