Lendlease today announces the sale of UK development assets into a 50/50 joint venture (JV) with The Crown Estate, an independent commercial business tasked with returning its profit to the UK government. The sale includes six of Lendlease’s UK development projects, comprising land holdings and capital efficient land management agreements1 . Through the transaction, Lendlease will accelerate the release of more than $300 million2 of capital from its longer-dated international development book and will halve its future funding commitments to ~$125 million, while continuing to meet its existing obligations relating to master planning and site enablement. The transaction is subject to conditions precedent, including public authority consents3 with parties working to satisfy these conditions in FY26.

The transaction is expected to release capital slightly above book value on completion and contribute positively to future earnings through lower funding costs and the receipt of development management fees. The JV, which was initiated by Lendlease with The Crown Estate, will create an industry-leading alliance with deep sector experience in delivering sustainable, city-shaping projects and is anticipated to accelerate planning and project delivery to provide much needed housing supply for Greater London and its residents. The Crown Estate is an ideal partner, with more than $30 billion of core land and asset holdings across the UK and a commitment to deliver profitable, long-term national outcomes.

The delivery of JV projects, spanning a number of London boroughs and Birmingham, is expected to provide strong economic, social and environmental benefits, including approximately 26,000 new residential dwellings and more than 900,000 square metres of prime sustainable office and life sciences space. Renewed momentum in planning and land entitlement anticipated from the JV will help to accelerate the release of land parcels, with the sale of entitled land expected to self-fund master planning costs across the portfolio. Neither JV partner is obliged to undertake any future vertical development as it is anticipated that entitled land lots should be able to be sold to third parties, although each has the right to commit up to 50% of the capital per development. Lendlease retains asset management rights for any vertical developments where it maintains a co-investment interest, with the potential for up to $24 billion of new investment product to be created from the JV’s development portfolio, spanning sustainable office, build-to-rent and life sciences assets.

Lendlease will be appointed by the JV as the development manager with development management fees payable on a cost-plus and performance basis in relation to services provided to the JV. For any vertical development in which Lendlease chooses to co-invest, Lendlease will also be appointed the development manager and will receive a fee calculated as a percentage of total development cost. Lendlease will assess any co-investment stake against its capital allocation framework and target ownership of c.10% for any co-investment made, as outlined at the 2024 strategy update. The release of capital brings Lendlease’s total of announced or completed capital recycling initiatives to $2.5 billion in FY25 out of a target of $2.8 billion and provides additional progress towards launching a security buyback.

Investment management update

Lendlease also announces today the recent commencement of a $1.2 billion investment mandate in Australia on behalf of an existing investor, the National Pension Service (“NPS”). The mandate for the management of Aurora Place, Sydney, was secured as part of a competitive process and increases Lendlease’s funds under management of Australian office assets to approximately $20 billion, with ~80% in Sydney and the majority being premium sustainable office assets. This new mandate reflects Lendlease’s strong domestic and international investment management capabilities and follows Lendlease’s recent introduction of two new investment partners into 21 Moorfields in London. Lendlease remains committed and focused on driving the performance of its funds and mandates across its Australian and international investment management platform.

Quotes attributable to Tony Lombardo, Group CEO, Lendlease “This partnership will create an industry leading alliance that is expected to unlock value within our high-quality UK development portfolio, while accelerating the release of capital for the Group. “With our expertise in delivering city shaping urban regeneration projects, the joint venture aims to deliver positive outcomes for our securityholders, communities and partners. “Since announcing our refreshed strategy in May last year, we have made strong progress to simplify the Group, reduce our risk profile, and recycle capital to be a more focused organisation. “While we have completed or announced $2.5 billion of capital recycling initiatives, achieved our cost out target and exited international construction, we have also grown our network of global capital partners. T

Quotes attributable to Dan Labbad, CEO, The Crown Estate “With strong support from local and national government, we look forward to working with Lendlease and others to realise the potential of these projects to create jobs, stimulate growth and positively impact lives, while also generating income for the UK. “As a country, we face challenges to unlocking growth. To support this, we need to spark investment in sectors like science, technology, and housing, alongside deep collaboration across communities, government, and the private sector. This joint venture is an example of how The Crown Estate is harnessing its mandate to act in the UK’s long-term national interest, supported by new investment powers, and stepping up its ambition to support inclusive growth for the nation.”