Despite ongoing headaches from its troubled engineering division, construction giant Lendlease has upped its development pipeline globally to $112 billion and returned a $313 million profit.
The ASX-listed developer, led by Steve McCann, said the turnaround was down to significant progress on its cornerstone strategy focusing on its core urbanisation pipeline in key global gateway cities.
Lendlease's pipeline, now worth an estimated $112 billion, spans 21 sites across nine cities with $37 billion of funds under management.
The Australian property business added two new major urbanisation projects to its portfolio—the $15 billion Thamesmead Waterfront in London and a $21 billion partnership with Google in the San Francisco Bay Area, in what will be the global developer's largest-ever project.
Forming part of its global development pipeline, Lendlease also has another urbanisation project in Milan Italy, a 2.5 billion (A$4bn) contract to transform a 100-hectare site into residential and commercial.
The result of the additional projects helped lift the company's return on equity to 9.8 per cent.
“Our urbanisation pipeline is expected to create more than $50 billion of institutional grade assets for our capital partners and the Group’s investments platform,” McCann said.
“We are well placed to double our current $37 billion of FUM as this pipeline is delivered.”
The company's construction arm delivered $4.3 billion of construction work with completed projects including the Gosford Hospital Redevelopment, the redevelopment of Rod Laver Arena and Paya Lebar Quarter in Singapore.
The $4 billion Paya Lebar Quarter, Singapore’s newest lifestyle precinct, comprises three office towers, a retail mall and more than 400 apartments.
Delivery commenced on several developments including residential apartments for sale at its three-tower development One Sydney Harbour in Barangaroo where pre-sales reached $1.4 billion—including the sale of a nine-bedroom penthouse, transacting for $140 million.
Lendlease has also tapped into the blossoming build-to-rent property sector in Europe and the US recording upwards of 1,700 apartments in delivery.
After announcing late 2018 that it was taking $350 million in after-tax write-downs on its underperforming engineering business, the multinational property developer managed to sell part of its engineering business to Spanish group Acciona for $180 million.
Acciona will acquire the engineering arm excluding the NorthConnex and Kingsford Smith Drive projects, which are in final stages and will be completed by Lendlease.
The Melbourne Metro Tunnel Project is also currently excluded, with the project consortium working with government to resolve issues in relation to the scope and costs on the project.
Earlier this year Lendlease confirmed that John Holland—which was gearing up to buy its up-for-sale services business—had pulled out of the process.
The company's services business secured $1.1 billion of new work during the period including telecommunications contracts and a multi year contract with Sydney Water.
The company listed its Global Commercial REIT in Singapore for $1.5 billion.
Lendlease also sold a 25 per cent interest in a tower it is developing above the future Victoria Cross metro station in North Sydney to one of its wholesale unlisted property trusts in a $300 million deal.
Lendlease shares rose nearly 7 per cent to close out at $18.60 on Thursday.