Development giant Lendlease has capitalised on a strong residential development sector to deliver an 8 per cent lift in half year profit, announcing a share buyback of up to $500 million.
Lendlease’s $425.6 million profit – up from a $394.5 million profit in the previous corresponding period – was driven by strong performance in residential development, with development completions up 48 per cent.
“The strong performance of our development segment was underpinned by the residential sector, with a 48 per cent increase in residential development completions and the launch of a residential for rent investment partnership with CPPIB in London,” chief executive Steve McCann said.
Related reading: Lendlease Submit New Proposal for Former Channel Nine Site
Lendlease’s $5 billion construction book saw construction EBITDA adversely impacted by a small number of underperforming engineering projects.
The company generated net operating and investing cash flow of $825.2 million for the half year.
“The addition of High Road West in Tottenham in London and Milano Santa Giulia in Milan brings our global urbanisation portfolio of major projects to 16 and delivers on our stated objective of diversifying to targeted international gateway cities,” McCann said.
These two major projects have an end value of about $5.4 billion.
“While we saw underperformance in our construction segment, this was confined to a small number of engineering projects. We have continued to invest in our capability and have been selective and disciplined in our recent origination. We have positive momentum behind the business and continue to make progress, securing $3 billion of transport infrastructure projects in Australia,” Mr McCann said.
Related reading: Lendlease Announce Partnership to Develop Aged-Care in Brisbane
Lendlease has an extensive development pipeline of $56.7 billion, with $40.3 billion of urbanisation projects and $16.3 billion of Communities and Retirement projects.
The company announced an interim distribution of 34 cents per stapled security, up 3 per cent.
Main image: Earlier this year Lendlease and CPPIB announced their partnership with an initial investment of £450 million in the development of build-to-rent accommodation in London’s Elephant and Castle neighbourhood as featured above.