Infrastructure business picks up for Lend Lease

LEND Lease has boosted its infrastructure and development business with its appointment to two projects in Western Australia and Adelaide.

By InvestSMART · 7 Sep 2011

By InvestSMART ·
7 Sep 2011

Comments

LEND Lease has boosted its infrastructure and development business with its appointment to two projects in Western Australia and Adelaide.

At its annual results last month, the group said its Valemus division, which includes Baulderstone and Abigroup, would be an aggressive player in the year ahead.

It is expected the business will also pitch for infrastructure projects in western Sydney earmarked by the NSW government.

Lend Lease bought Valemus in March to give it exposure to the growing infrastructure industry.

Lend Lease's chief executive, Steve McCann, said Valemus had been selected as preferred developer for construction work on the Adelaide Oval redevelopment project.

Baulderstone will work with the Adelaide Oval Stadium Management Authority and the Department of Transport, Energy and Infrastructure to redevelop the oval into a 50,000 seat multi-purpose venue.

"Construction will commence after the end of the cricket season in March 2012, with practical completion expected in 2014 in time for the AFL season," Mr McCann said.

Macquarie Equities property analysts said Lend Lease's performance would be driven by the inclusion of the Valemus business. "Non-residential construction is likely to remain somewhat subdued in the short term although with projects including Barangaroo, RNA Showgrounds in Brisbane, and Victoria Harbour in Melbourne, earnings should begin to improve by the second half of 2012," they said.

Mr McCann also confirmed Lend Lease's Syntheo joint venture had secured a $174 million contract from NBN Co for the fibre network roll-out in Western Australia. Syntheo is a joint venture between Lend Lease's project management and construction business and Service Stream.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What recent infrastructure and development projects has Lend Lease been appointed to?

Lend Lease has been appointed to two projects mentioned in the article: a major redevelopment in Adelaide (the Adelaide Oval project) and work in Western Australia. The company’s Syntheo joint venture also secured a contract for the NBN Co fibre roll-out in Western Australia.

What is Valemus and why did Lend Lease acquire Valemus?

Valemus is a division that includes construction businesses Baulderstone and Abigroup. Lend Lease bought Valemus in March to give the group greater exposure to the growing infrastructure industry and said Valemus would be an aggressive player in the year ahead.

What are the key details of the Lend Lease Adelaide Oval redevelopment?

Valemus was selected as preferred developer for the Adelaide Oval redevelopment. The project will redevelop the oval into a 50,000-seat multi-purpose venue, with Baulderstone working alongside the Adelaide Oval Stadium Management Authority and the Department of Transport, Energy and Infrastructure. Construction was set to start after the cricket season in March 2012, with practical completion expected in 2014 in time for the AFL season.

Who will Baulderstone partner with on the Adelaide Oval project?

Baulderstone will work with the Adelaide Oval Stadium Management Authority and the South Australian Department of Transport, Energy and Infrastructure to deliver the Adelaide Oval 50,000-seat redevelopment.

How might the inclusion of Valemus affect Lend Lease’s financial performance?

Macquarie Equities analysts said Lend Lease’s performance would be driven by the inclusion of the Valemus business. While non-residential construction was expected to remain somewhat subdued in the short term, analysts flagged that large projects (such as Barangaroo, the RNA Showgrounds and Victoria Harbour) should help earnings begin to improve by the second half of 2012.

What is the Syntheo joint venture and what contract did it win for Lend Lease?

Syntheo is a joint venture between Lend Lease’s project management and construction business and Service Stream. According to the article, Syntheo secured a $174 million contract from NBN Co to work on the fibre network roll-out in Western Australia.

Will Lend Lease pitch for Western Sydney infrastructure projects?

Yes. The article says Lend Lease’s business — including Valemus — is expected to pitch for infrastructure projects in western Sydney that have been earmarked by the NSW government.

When should investors expect Lend Lease construction earnings to start improving?

Based on the commentary in the article, analysts expected earnings to begin improving by the second half of 2012 as major projects move forward, despite a subdued non-residential construction market in the short term.