Lendlease Results 2021

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Social distancing protocols across construction sites has knocked 16 per cent in revenue off of listed developer and builder Lendlease’s end of year results.</p><p>Despite ongoing site shutdowns and lower productivity globally the company has managed to return its books to a healthier position than the previous financial year.</p><p>Lendlease reported that statutory profit after tax reached $222 million for the period, following a $310 million loss in the 2020 financial year. </p><p>Full year pre-tax operating profit was up 83 per cent, to $377 million, boosted by a 2.7 per cent gain in construction EBITDA profit thanks to <a href="https://www.theurbandeveloper.com/articles/lendlease-offloads-services-business">the sale of its loss-making engineering and services businesses.</a></p><p>The result was also supported by reducing costs across overheads, employee expenses, and project expenditure.</p><p>The figure, lower than market expectations of $390 million, lead to shares falling by 7 per cent to $11.71 in afternoon trade.</p><p>Newly-appointed global chief executive Tony Lombardo said the group was now looking to “reset market expectations”, with a full recovery not expected until 2024.</p><p>“Despite Covid impacts, profit recovered and the group made significant strategic progress,” Lombardo said. </p><p>“[However] we expect the 2022 financial year to be the cyclical low point for both development production and profitability.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/41d18a31-dccc-4298-898e-3c8f0803b3e2.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲  Lendlease has returned its focus to its core businesses following the divestment of its services, engineering, retirement living, and US energy businesses.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“We are targeting to deliver solid returns across the construction and investments segments, although activity levels are likely to continue to be affected by the pandemic.”</p><p>Analysts agreed, noting that 2022 would likely be a cyclical low in the company’s earnings expecting downgrades given the weak development guidance.</p><p>USB analyst Tom Bodor said the group return on equity target of between 8 and 11 per cent by 2024 reflected a delay of one year to the group’s financial recovery. </p><p>“The 2022 financial year is a ‘reset year’ for Lendlease with development return on invested capital expected to be between 2 and 5 per cent versus a target of 10 to 13 per cent,” Bador said.</p><p>Lombardo warned that his strategic review of the business, expected to be released at the end of the month, would continue to centre on “disciplined cost management”.</p><p>“The recently announced changes to the organisational structure better position the group to accelerate development production, continue to deliver our construction backlog and grow our investments platform in a more focused and efficient way,” Lombardo said.</p><p>“The review of the development portfolio reaffirmed the underlying strength of the $114 billion development pipeline across targeted gateway cities.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/d05372dc-1456-4252-9c0d-ee0e1f9bbb03.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Artist’s impression of Lendlease’s latest project in Tokyo.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Across the year, Lendlease strengthened its role as a residential developer and landlord adding $8.4 billion in projects to its development pipeline, including six urbanisation projects with an end value of $7.4 billion.</p><p>The company that has set itself a target of $8 billion plus worth of production per year by 2014 has a work-in-progress pipeline worth $14.5 billion, $7 billion of which are build-to-rent apartment projects as well as master-planned community products.</p><p>The company currently has 22 major urbanisation projects across 10 global capitals, including London, Milan and New York.</p><p>Locally, the company’s larger projects include Sydney Place, Victoria Cross and Barangaroo South in Sydney, Melbourne Quarter and Victoria Harbour in Melbourne, Brisbane Showgrounds and Waterbank in Perth.</p><p>The company also struck up investment partnerships worth $5.1 billion were formed across five upcoming projects.</p><p>Lombardo said the shared approach would help the company drive growth in funds under management, including exposure to the rapidly growing sub-sectors of life sciences and data centres. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Lendlease shifts gears for hyperscale project</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Lendlease will break ground on an $800 million hyperscale centre in Tokyo later this year as demand for data centres continues to surge.</p><p>The centre, which will be one of the largest ever delivered in Japan, will span 66,000sq m of office and data racks across a 33,000sq m site. </p><p>The project will be delivered by Lendlease Data Centre Partners, funded 20 per cent by Lendlease and 80 per cent a global institutional investor.</p><p>Lendlease Japan managing director Andrew Gauci said the centre marked a significant milestone for the group, adding a sizeable project to its global development pipeline.</p><p>“The demand for data centres in the Asia Pacific is set to grow exponentially, with internet-related services usage soaring due to the pandemic,” Gauci said. </p><p>“This project is of significant scale in a sector of growing importance and will leverage our more than 20 years’ experience in the local communications and data infrastructure space, as well as Lendlease’s broader presence in Japan for over 30 years.”</p><p>The group said construction was earmarked to commence later this year with the initial phase to be completed by early 2024.</p></div></div></div></div></div>

  New Lendlease boss Tony Lombardo expects 2022 to be a challenging financial year after returning the company’s books to profitability in 2021...

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>GPT is the latest listed property fund to report subdued earnings due to market headwinds, with lower revaluation gains causing a 51.6 per cent decline in net profit.</p><p>In its interim results delivered Monday, the diversified property group reported a net profit of $352.6 million down from $728.5 million a year earlier.</p><p>GPT reaffirmed its guidance of 2.5 per cent growth in funds from operations and a 4 per cent increase in its full-year distribution. Funds from operations — the preferred method for measuring REIT earnings — increased 2 per cent to 16.36 cents a share. </p><p>Continued strength in commercial markets buffered losses in retail, with GPT’s office assets delivering $114.8 million in value uplift and occupancy of 97.1 per cent over its $5.9 billion office portfolio.</p><p>GPT chief executive Bob Johnston said that office market fundamentals in the group’s core markets remain positive. </p><p>Johnston said Melbourne Central <a href="https://theurbandeveloper.com/articles/gpt-timber-tower-300-lonsdale-street-melbourne-cbd">tower</a>, 181 William and 550 Bourke Streets in Melbourne and Australia Square in Sydney were the key contributors to the value uplift. </p><p>GPT is jointly undertaking the $1 billion Cockle Bay Wharf redevelopment with Canada’s Brookfield and AMP, with plans for a 73,000sq m office tower. The group secured a further 25 per cent interest in Darling Park 1 &amp; 2 office complex for $531 million in June.</p><p>The Cockle Bay redevelopment and Darling Park acquisitions are funded in part by fresh <a href="https://theurbandeveloper.com/articles/gpt-group-seek-to-raise-800-million-for-sydney-cbd-buy">equity raising</a> by GPT, which tapped the market for more than $850 million in June.</p><p>Related: <a href="https://theurbandeveloper.com/articles/mirvac-results-2019">Mirvac Shows Resilience Despite Residential Blip</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/8be15f7f-a099-4815-9860-0efabf075680.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ GPT offloaded a 50 per cent stake in the MLC tower to Dexus for $800 million in March. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>GPT is among a spate of <a href="https://theurbandeveloper.com/articles/growthpoint-cromwell-boost-coffers-as-reit-appetite-ramps-up">listed REITs</a> taking advantage of increasing access to capital and low interest rates to pad out their development pipelines.</p><p>The group said the funds will also strengthen the group’s logistics portfolio to offset its exposure to retail property. </p><p>In May, GPT acquired five fully-leased logistics assets in Sydney to adjoin the group’s existing Erskine Park precinct for $212 million. </p><p>Johnston said the acquisitions were consistent with the group’s strategy to grow its logistics portfolio, with $200 million of logistics development currently under way. </p><p>GPT has decreased its retail portfolio weighting by 16 per cent since 2010, while its retail assets declined in value by $35.4 million over the reporting period.</p><p>Johnston said the group was progressing development proposals for both <a href="https://theurbandeveloper.com/articles/gpt-timber-tower-300-lonsdale-street-melbourne-cbd">Melbourne Central</a> and Rouse Hill <a href="https://theurbandeveloper.com/articles/lendlease-announces-sale-of-new-rouse-hill-site">town centre</a>, “to ensure that they are well-positioned to grow market share and respond to changing market conditions”. </p><p>GPT expects to commence both redevelopment projects in the first half of 2020. </p></div></div></div></div></div>

GPT is the latest listed property fund to report subdued earnings due to property market headwinds.

Event Hospitality and Entertainment $255 million plans for a ultra-slim Sydney CBD tower were approved.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Event Hospitality will progress $255 million plans for a ultra-slim Sydney CBD tower following a harrowing financial year including multiple natural disasters and the coronavirus pandemic.</p><p>The ASX-listed hospitality giant lodged the development application  in July 2019 which was approved with conditions in May 2020 by the Central Sydney Planning Committee. </p><p>The 43 storey hotel-residential tower <a href="https://theurbandeveloper.com/articles/event-cinemas-lodges-plans-for-george-street-skyscraper-">plans </a>for George Street make up a fraction of the hospitality giant’s $2 billion property portfolio across Australia, New Zealand and Germany.</p><p>Company profit for the financial year was down 78.5 per cent to $34 million after “mandated restrictions almost entirely wiped out revenue” between March and June, and stocks dropped following the results announcement.</p><p>Event chief executive Jane Hastings said until February the group had the second-highest earnings result in its history despite the bushfires. </p><p>“The year was impacted by the most unprecedented external factors experienced in the group’s 110-year history, including bushfires, floods and Covid-19 government-mandated restrictions,” Hastings said.</p><p>“The final four months of the year was defined by the impact of Covid-19 government-mandated restrictions which immediately impacted revenue, down $262 million for the four-month period.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/046fc471-7753-43b1-a927-7691439d21df.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Event owns an office building, cinema complex, Dudley House and surrounding buildings on the proposed tower site and along George Street in Sydney CBD.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The company embarked on $140 million in cost reductions including government subsidies and rent relief, and there was no final dividend given in June.</p><p>Looking forward, Event is waiting for the government to drop restrictions impacting cinemas as well as hotel trading, which has operated with lower average room rates just inside the profitable range at 66.1 per cent occupancy.</p><p>Meanwhile, increased insurance premiums worth $2 million for the office sector and ongoing leasing liabilities will negatively affect this outlook.</p><p>However, Thredbo ski resort, on which Event has a 956.9-hectare leasehold (until 2057), is expected to boost the start of the next financial year’s results.</p><p>Despite bushfires and the pandemic affecting summer and winter seasons in New South Wales, the asset recorded its third-highest result in history at $20.9 million, down 16.3 per cent on the year before. </p><p>In contrast, Victoria’s ongoing battle with Covid-19 infections and increased restrictions led to NYSE-listed Vail Resorts’ <a href="https://theurbandeveloper.com/articles/vail-resorts-closes-victorian-alpine-ski-mt-hotham">closure </a>of its Mt Hotham and Falls Creek operations in July.</p></div></div></div></div></div>

   Event Hospitality and Entertainment will sit on the approved $255 million plans for a ultra-slim Sydney CBD tower...

FINANCIAL RESULTS