MILAN: Lendlease announced Monday it has agreed to sell its development rights for the Milano Santa Giulia mixed-use project in Milan, known as MSG North, taking a projected post-tax operating loss of $175 million.
The Australian development giant said the sale to an investment group sponsored by local developer Bizzi & Partners S.p.A. has a gross value of approximately $250 million. The buyer will acquire Lendlease’s units in the Heartbeat Fund — which holds the development rights — for $90 million in cash, assume about $160 million in project debt, and fund future remediation and infrastructure work.
The sale comes at a discount to book value. The loss will be recorded within Lendlease’s Capital Release Unit in the 2026 fiscal year.
Completion hinges on conditions including third-party approvals.
Group Chief Executive Officer Tony Lombardo called the project “commercially challenged” but said the sale aligns with the company’s strategy to reduce long-dated international development capital and simplify operations.
While the transaction will result in a loss, Lendlease said it removes future capital obligations tied to the project, including holding costs. The company has been advancing capital recycling initiatives since a May 2024 strategy update, announcing or completing roughly $2.9 billion in such transactions to date.
Lendlease reported holding more than $3 billion in liquidity as of the first half of fiscal 2026. On May 25, Moody’s reaffirmed the company’s Baa3 investment-grade credit rating with a stable outlook.
The company expects to provide a further update on other pending transactions by June 30.
