’Profound change’ for Australia-based group to see its development and construction arms based solely on home turf

Lendlease is pulling out of the UK and selling its overseas construction businesses so that it can focus on its operations in Australia.

The New South Wales-based multinational has announced a sweeping restructure aiming to free up AD $4.5bn (£2.35bn) of capital in order to pay down debt and realise value for its shareholders.


Regional management structures will be removed over the next 12 months, Lendlease said

Regional management structures will be removed over the next 12 months with its construction business to be focused solely on Australia by the second half of 2025, the firm said in a strategy update published yesterday.

The move comes after four years of steadily dropping share prices with the firm’s stock having lost around half of its value since the pandemic.

Low overseas construction earnings of just 0.6% and “overweight, long-dated” projects which have been impacting security holder returns were also mentioned in the 47-page strategy document.

Delays have hit several of the firm’s biggest schemes in the UK including CO-RE’s £700m ITV studio redevelopment, which has been stuck in planning limbo for two years, the £429m 120 Fleet Street job in the City of London which has been stalled by ongoing discussions with its Chinese developer and the £1.9bn Smithfield scheme in central Birmingham which has undergone several redesigns.

Lendlease chairman Michal Ullmer admitted that security holder returns had been “poor” amid a series of structural challenges and a prolonged market downturn.

“We need to take significant action at an accelerated pace to deliver value for our securityholders, capital partners and customers,” he said.

“We have announced the blueprint to position Lendlease for success, focusing on our core strengths and competitive advantages. We have thought very carefully about the necessary strategic refocus and made some tough decisions.”

The firm said it would hold onto its international investment platform, the only part of the group which will remain active outside of Australia following the restructure.

Group chief executive Tony Lombardo said a “new Lendlease is emerging” through the “decisive actions” announced in the strategy update.

“One that is firmly anchored in the very best of our proud legacy, but less complex, more focused and fit for purpose,” he added.

“This new Lendlease will be more easily understood by our people and customers, and transparent and predictable for securityholders. 

Make ITV 1

CO-RE’s ITV Studios redevelopment has been one of several Lendlease schemes in the UK hit by delays

“By reshaping the portfolio, concentrating on our core competencies in markets where we have proven we have the right to play, and the competitive advantage to win, the financial and operational risk profile will be lower, and we believe the quality of our earnings [will be] ultimately higher and more sustainable.”

Lombardo said significant work on the new strategy had already been undertaken and several transactions were well advanced.

Seeking to reassure clients and overseas staff, he said the firm would not walk away from existing commitments and would “treat our people around the world with the care and respect they deserve as our business changes.”

But he said the restructure would be a “profound change” that has been based on “some very tough but necessary decisions”.

A key part of the restructure will be the creation of a capital release unit (CRU) which is expected to divest AD $2.8bn (£1.46bn) by the end of 2025.

There will also be a series of impairments and charges valued at up to AD $1.475bn (£770m) pre tax in financial year 2024 that include a write down of goodwill related to the US and UK construction businesses which arose from Lendlease’s acquisition of Bovis in 1999.

Other transactions expected to be completed over the next 12 months include the sale of half of its Asia Life Sciences unit to private equity giant Warburg Pincus.