Lend Lease development projects rise to $37.4b

Lend Lease has increased its development project business to $37.4 billion, the largest in its 50-year history. It is dominated by Barangaroo South, Darling Harbour and the Elephant and Castle site in London.

In its September quarter update, the company also gave emphasis to its global construction pipeline of $17.2 billion, across the US, Australia and Asia.

In the residential, retirement and apartment business, the company reported a 20 per cent growth in overall sales volumes in the September quarter compared with the June one.

The group, which does not issue any earnings guidance, said there was a strong medium-term outlook.

Lend Lease’s chief executive and managing director Steve McCann said the group would look to finance the projects using third-party capital, in the form of joint ventures, which would enable continued investment in the development pipeline in 2014 and 2015.

Simon Wheatley, of Goldman Sachs, said the increased long-term commitment to apartment development, the earlier-than-expected peaking of US construction activity, the potential longer term move to urban-regeneration projects in the US, and the stronger domestic residential communities activity very recently were the key factors of the update.

Mr McCann said there was strong growth in the development business from key projects including Barangaroo South, but the tougher macro conditions in construction remained, offset by the stronger pipeline of economic infrastructure and public and private partnership projects.

At Barangaroo South, directors said there was strong leasing inquiries for the third office tower.