Lendlease has announced a significant strategic move, entering a 50/50 joint venture with the UK’s Crown Estate to offload six of its UK development projects in a partnership set to unlock more than $300 million in capital.
The deal also reduces Lendlease’s future funding commitments to about $125 million, aligning the company’s broader strategy to streamline operations and focus on its Australian core business.
‘Industry-leading alliance’
The joint venture encompasses projects such as Stratford Cross, Euston Station and Birmingham Smithfield. While Lendlease will retain development management responsibilities, the Crown Estate will provide funding, leveraging its substantial UK asset base valued over more than $30 billion.
“This partnership will create an industry-leading alliance that is expected to unlock value within our high-quality UK development portfolio, while accelerating the release of capital for the group,” Lendlease group CEO Tony Lombardo said.
“With our expertise in delivering city-shaping urban regeneration projects, the joint venture aims to deliver positive outcomes for our securityholders, communities and partners.”
The collaboration aims to deliver about 26,000 new homes and more than 900,000 square metres of sustainable office and life sciences space, addressing housing shortages and promoting economic growth in Greater London and Birmingham.
Broader restructuring
The move is part of Lendlease’s broader $4.5 billion capital recycling initiative, which includes the sale of its UK construction arm and other international assets. The company has so far achieved $2.5 billion of its $2.8 billion near-term capital recycling target, bringing it closer to its goal of returning $4.5 billion to Australia over three years.
In addition to the joint venture, Lendlease has secured a $1.2 billion investment mandate in Australia from the National Pension Service, further emphasising its shift towards domestic projects. The mandate for management of Aurora Place in Sydney increases Lendlease’s funds under management of Australian office assets to about $20 billion.
While some analysts have upgraded their outlook on Lendlease, sceptics have cited the complexities of Lendlease’s legacy overseas commitments and challenges facing its turnaround strategy. It was trading slightly down on the ASX as of Monay afternoon.
Nonetheless, the company’s recent financial performance has shown signs of improvement. Lendlease reported a statutory profit of $48 million for the first half of the 2025 fiscal year, a significant turnaround from a $136 million loss for the first half of fiscal 2024, reflecting the early benefits of its restructuring efforts and renewed focus on high-yielding Australian projects.