Lendlease posts double-digit rise in profit on construction boost

Listed property group Lendlease Corporation Limited said half-yearly profit after tax rose 12 percent to $394.8 million from a year earlier, helped by a boost in construction earnings.

Revenue in the six months to December 2016 was up 8 percent to $7,945 million over the comparable period the previous year.

The company said remaining end development pipeline grew 5 percent to $49 billion, of which $35 billion comprised urbanisation projects. It said the development segment “continues to maintain a strong residential pre-sales position, closing the period at $5.7 billion.”

Its EBITDA mix comprised a 38 percent growth in development earnings, while investments generated 40 percent.

Lendlease Group chief executive and managing director Steve McCann said commercial development, in particular the Australian office sector, was a highlight of the first half result. 

“At Barangaroo South, Tower 1 reached practical completion with all three office towers now operational,” said McCann. 

“We had success in converting our pipeline into delivery with the forward sale of three office buildings, in addition to the creation of a capital solution for the Circular Quay Tower.”

Lendlease said it secured new tenants across the commercial development pipeline. New leasing agreements were secured across approximately 85,000 sqm of commercial space in the period, predominantly in Australia. 

The company declared an interim unfranked dividend of 33 cents per stapled security.

Residential settlements included apartments at Victoria Harbour in Melbourne. Its offshore pipeline includes projects in Singapore, London and the Americas.

• In Singapore, construction at the Paya Lebar Quarter is progressing well and during the period management secured two anchor tenants for the retail component of the development. The project remains on track for completion in FY19. 
• In Europe, apartment settlements were achieved at the Glasshouse Gardens at International Quarter London and South Gardens at Elephant and Castle in London. 
• In the Americas, work has commenced at Riverline in Chicago, Clippership Wharf in Boston and 281 Fifth Avenue in New York. These projects are all in the residential sector, representing a mix of multi-family and condominium product. 

It said communities settlements were down compared to the prior corresponding period due to project timing.