Lendlease Corporation agrees to sell US Military Housing business for $320

SYDNEY: Lendlease Corporation has entered into an agreement with Omaha Beach Investment Holdings, LLC, an entity managed by Guggenheim Partners Investment Management, LLC, for the sale of its US Military Housing business for $480 (US$320) million.

The sale represents a significant premium to book value and includes the operating platform of the business along with the associated management rights for asset, property, development and construction management. Approximately 150 employees will transfer with the sale.

The transaction builds on the significant progress made by Lendlease as it executes on the strategy announced in May 2024, re-focussing on its Australian operations and international investment management capabilities, while recycling more than $4.5 billion of capital.

FY25 OPAT of $105 to 120 million is anticipated from this transaction, with financial close and receipt of cash proceeds targeted by the end of 1H FY25. The transaction is subject to completion adjustments and conditions precedent including third-party consents from particular service branches of the U.S. Department of Defense.

Lendlease Group CEO Tony Lombardo said: “With $1.9 billion of transactions already announced, including the sale of US Military Housing, we have made significant progress towards our target of recycling $2.8 billion of capital in the next 12 months. As this transaction demonstrates, we continue to take a disciplined approach to capital recycling, achieving premiums to book value, as we balance speed of execution with achieving value for our securityholders.”

“Implementation of our strategy is progressing well, with cost savings being realised across the regions as we today move to a simplified management structure. We are also working to complete the sales of our Life Sciences joint venture and our Communities projects.”

“The announced exit from international Construction is well progressed, with the sale of our US East Coast operations anticipated to close in the coming months, Preparations have also commenced to sell our UK construction business within the next 18 months.”

Processes to recycle a further $1.1 billion of capital in FY25 are underway, including the sales of The Exchange TRX in Malaysia, our Keyton Australian Retirement Living investment and China Senior Living asset.”

“Our priorities remain strengthening our balance sheet, returning capital to securityholders and investing in our high return Australian operations, while continuing to build on our Australian development pipeline to support future earnings growth.”

Lendlease advises that completion of the sale of its Life Sciences interests into a new Asia Pacific Joint Venture is now expected to complete in 1H FY25, subject to the satisfaction of the final conditions precedent.

As a result, Lendlease anticipates FY24 OPAT to be $260 to 275 million. FY24 Group gearing is now anticipated to be at the upper end of the 10-20 per cent target.