This article is from the Australian Property Journal archive
LENDLEASE continues to simply its business with the $235 million sale of its infrastructure financing business Capella Capital to Japanese company Sojitz Corporation.
Sale of Capella Capital follows Lendlease earlier this month divesting its UK construction business. That finalised the property giant’s exit of its international construction operations well ahead of the schedule announced in May last year, when it bowed to pressure from frustrated investors and announced a $4.5 billion capital recycling program that would see it jettison problematic and costly offshore projects in favour of a focus on local operations.
Lendlease has now announced $2.2 billion worth of capital recycling initiatives. It also announced completion of the $516 million sale of its US Military Housing business to Guggenheim Partners Investment Management.
Around $70 million towards Lendlease’s FY25 operating profit after tax will be generated by the Capella Capital sale.
Capella Capital was established in 2009 as a partnership between Lendlease and senior Capella management. Sojitz will acquire Lendlease’s interests in Capella’s infrastructure platform which consists of asset origination, asset management and principal equity investments, with about 80 Capella employees to transfer with the sale.
“Lendlease and Capella will continue working closely to complete projects currently in delivery with no impacts expected as a consequence of the sale. Upon completion of the sale, Lendlease and Capella have agreed to continue to cooperate on current and future Capella projects where Lendlease has capability, such as construction or development services,” Lendlease said.
The transaction is subject Foreign Investment Review Board (FIRB) approval and other third-party consents, with completion targeted by the end of FY25.
Lendlease said its earnings guidance and gearing expectations for FY25 remain unchanged.
“The announced Capella Capital and Military Housing divestments progress our strategy to simplify the Group, as we work towards becoming less complex, more focused and ultimately more profitable,” Lendlease group CEO Tony Lombardo said.
Following a string of soft results and returns and ongoing scepticism around the viability of its overseas activities, key shareholders, including Aware Super and John Wylie’s Tanarra Capital had been agitating for management and business change – effectively claiming the scalp of chair Michael Ullmer, who stepped down at the AGM.
Lendlease recently received FIRB approval for the $1.06 billion sale of 12 land lease communities in NSW, Queensland and Western Australia to Stockland and and Supalai.
Meanwhile, construction is now underway on Lendlease’s new $500 million build-to-rent development on Melbourne’s Docklands, shortly after it announced its partnership with Japan’s Nippon Steel to deliver the project; while nearby it has been given the green light from the Victorian government to build 915 apartments that will complete its Collins Wharf project.
