King Charles Crown Estate company closing in on local property deal with Lendlease

The prospective deal will halve Lendlease’s future funding obligations, accelerate its master planning in the UK for government clients and generate future fee income, it said.

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Lendlease said it would earn fees as the master developer of existing projects on behalf of the joint venture.

It expects to offset the cost of master planning and create further value by funding the venture through portfolio land sales.

“Lendlease’s immediate focus would be to continue to progress its master planning obligations, while retaining the rights for any vertical developments,” the statement said.

Lendlease chief executive Tony Lombardo has overseen a sweeping restructuring program, aiming to sell off $4.5 billion of overseas assets and funnel the cash into developing the company’s Australian operations.

The change in direction was prompted by a long-running campaign from high-profile dissident investors led by John Wylie’s Tanarra Capital, which put pressure on the company’s managers to simplify its global business and focus instead on Australia.

The company announced in May last year that it would sell all its overseas construction divisions, most of which were in the US and UK, and end its decades-long quest to be a globally recognised property builder.

It subsequently sold half of its life sciences construction operations in Asia to a new joint venture entity with Warburg Pincus for $147 million and offloaded its US military housing business in a $480 million deal to Omaha Beach Investment Holdings.

Consigli Building Group concluded a deal last September to purchase a large chunk of the company’s construction operations on the US East Coast valued at $US1.8 billion, and took over its 400-strong workforce.

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Early this year, Lendlease sold its UK construction business to Atlas Holdings for $70 million, marking the end of its international construction operations.

The company said in its half-year result in February that it had announced or finalised $2.2 billion under its capital restructure program and expected to hit its $2.8 billion target this financial year with a number of other transactions under negotiation.

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